Australian Globalization - Essay Example

Lecturer What have been the main effects of globalization in Australia? Globalization involves international integration which arises due to the interchange of ideas, world views, products and other cultural aspects (Steger, 2009). Advances in telecommunication infrastructure and transportation infrastructure are the main factors for globalization, leading to greater interdependence of socio-cultural, political and economic activities. The concept of globalization has been referred to extensively since mid 1980s. In 2000, the International Monetary Fund (IMF) gave four basic concepts of globalization. These concepts are; dissemination of knowledge, capital and investments transfers, migration of people, and trade and transactions (Hopkins, 2004). Globalization processes influence and are influenced by; natural environment, socio cultural resources, politics, economics, and work organization. Global movement of ideas, people and commodities increases significantly during the 19th century. Development of new transportation forms like railroads and steam ships, and telecommunication infrastructure enabled rapid rates in global interchange (Robertson, 1992). During the twentieth century, airlines, road vehicle and intermodal transport ensured faster transportation. Also by 2010, electronic communication like the internet and mobile phones connected millions of people worldwide (Robertson, 1992). The globalization has led to significant effects in Australia; in terms of transport, communication, business and governance (Stephenson, 1994). This research paper explains both the negative and the positive influencers that the globalization process has had on the; political, social cultural, economic and environmental systems of Australia. In reference to Australia, the globalization process is vital to the future economy, because of Australia’s economic, political and socio-cultural open nature open natures. Globalization is not a single issue, but describes the factors that change an economy like Australia’s into an economy identified with increased mobility of capital, investments, labor and trade. During the last 50 years, Australia has embraced this phenomenon, and therefore received benefits in the financial and trade sectors of the economy. These benefits led to related disadvantages and costs, especially to the organizations that cannot catch up with the increasing globalization process (Hopkins, 2004). This section of the research focuses on the three main area of globalization in Australia; these areas are social, political and economic globalization (Giddens, 1991). Politically, Australia as a country has a long and interesting history. The British colonized the country, through establishing a government with little regard and consideration of the indigenous people (Albrow, 1990). Colonization is a type of imperial globalization, in that the empire’s capital dominates or influences the culture found in the colonized country. In war or peacekeeping issues; Australia commonly aligns or identifies with USA and the Britain. For example, Australia was one of the Allied forces that emerged victorious during the Second World War. On the contrary, identifying with the USA on certain issues like failing to ratify Kyoto Protocol, has negatively affected it standing and reputation is certain developed countries (Booker, 1992). Natural calamities like the tsunami which occurred during the 2004 Boxing Day severely damaged many countries adjoining the Indian Ocean. This experience led to a positive aspect of globalization. Charitable action from nations, corporations, and even individuals to the countries hit by the disaster illustrated the global society helping countries with economic and social problems, and also infrastructure investments. The Australian government provided $1 billion to the Indonesian government for use in the Aceh area; the effect of tsunami in this region was so devastating (Friedman, 2008). The $1 billion comprised two parts; $500 million in aid, and also $500 million in for loans to be used in infrastructure and social rehabilitation (Friedman, 2008). Aid is a type of political globalization where countries work as a common unit in solving a problem. In certain instances, a state gives aid to another state directly, to boost its budget. In emergency situations, the states discuss the funds allocation. Economic globalization has ensured improvement in the economy of Australia. The country has vast economic resources, which the 20 million citizens cannot consume; hence the surplus is sold to other states that have adequate demand for resources (Robertson, 1992). Australia therefore has access to the global market of approximately seven billion people. The major exports of Australia include raw materials like produce and minerals; in the primary industry. The primary industry of Australia is estimated at 50% of the exports, and comprises iron ore, core and uranium, and other minerals. The primary market also exports cereals like rice and wheat, and meat and other meat products like wool and beef. The remaining 50% of total exports secondary goods and also the tertiary services. Secondary goods are commodities which have been manufactured or processed. Tertiary exports involve services such as tourism, hospitality, health, banking or education (Albrow, 1990). Australia imports some commodities and services. Crude petroleum makes up the major primary imports. Secondary imports include cars and computer; which are major secondary products. The major tertiary imports include majorly travel services like transportation, insurance and travel. Importation has led to many negative effects in the local industries (Robertson, 1992). The most affected industries are secondary; for example manufacturing. This is because labor costs in Australia are relatively high due to the higher living standards. A good example on this is that footwear producer, Blundstone, based in Tasmania since 1870s, relocated to Asia so as to minimize the production costs (Frank, 1998). In the past years, Australia traded mostly with Europe, due to the British Empire ties. Currently, the trading partners of Australia have increased, and majorly comprise USA and Asia (Frank, 1998). Japan is the biggest export market, fool owed closely by the USA. Also, China’s current participation in the world market has altered the trade pattern; this is due to its huge population of over one billion people (Frank, 1998). Current market trends indicate that China will overtake Japan, very soon, as the major customer of Australian goods and services. Globalization has had positive effects on Australia, due to substantial revenue, and stable government. Australia has never been affected by the debt cycle experienced by many developing countries. The county has also not experienced improper investments; bad investments led to the destruction of Asian economy during the 1990s. The economy of Australia, therefore, strengthened when globalization took off at the technological stage. In the social aspect, Australia has benefited for the globalization process tremendously. Before the mass application of information technology like the internet, Australia was seen to be away from the majority of the population of the world, in the Northern Hemisphere (Friedman, 2008). Currently, communication has become very accessible, and hence the geographical distance does not matter, and it is much easier to learn about other peoples’ cultures. Other people can also easily learn about the Australian culture through the social means. Multiculturalism is another outcome of social globalization; Migrants have come with certain aspects of home culture like custom, food and music (Frank, 1998). These cultural aspects have enriched the Australian society and culture. Many people in Australia understand the cultures of other people in different nations; this puts Australia as a country at a better position of understanding and embracing diversity. One major bottleneck of use of technology involves missing the social exchange with states that have limited communication technology. The other disadvantage is that the Australian society can be potentially dominated or influenced by other cultures, got from foreign lands. Australian society is currently influenced to a large extent by the more established world cultures, with large populations. For instance, the USA has a very established entertainment sector that dominates and influences the English broadcast media (Frank, 1998). Globalization led to different cultural consequences. These consequences can be analyzed into three major parts: homogenization, hybridization, and polarization (Martin and Quentin, 2002). The homogenization aspect illustrates that the global cultures rotates around Western or American culture. While there is evidence in support of this view; cultural resistance and alternatives to Western culture illustrates that polarization is more convincing in terms of world cultural developments. Global interconnection doesn’t mean cultural conformity. Hybridization explains that culture borrow elements from each other, creating a hybrid culture (David 1994). There are also other Globalization Effects in Australia. The negative effect of globalization on unemployment in the short term has been felt, especially in Australia. Since the year 1980, there has been a clear positive correlation between reductions in tariffs and the rate of unemployment (Steger, 2009). Between the years 1990 and 1998 the average tariff dropped, this is from 7% to 5%; this led to the increased in the number of export goods from 50,000 to 85,000 units. This increased production led to more employment as the Australian producers required more labor. On the contrary, in the short term, reduction in tariffs leads to short term unemployment in industries which are inefficient. This is due to inefficient industries in Australia being exposed to increased competition from the more established and efficient firms in the global market. In the world market, the demand for the products of inefficient firm falls, and therefore, the companies experience loss which may force them out of business. This is a weak argument because only shorter unemployment is realized. In the long term, the resources will be transferred to more efficient companies which have great competitive advantage; this result to more efficient industries, and therefore more employment in the long term (Keating, 1995). Globalization also has positive effects on government policy. The massive increase in quantities of goods exported, and the floating of the exchange rates in the year 1883; enabled the Australian government to put in place policies stated in the Washington consensus (Albrow, 1990). During the year 1983, the Keating government implemented the certain polices. They include; trade liberalization, fiscal discipline which ensured surplus, selling the national bank, financial system deregulation, which involves floating the exchange rate, and privatization of government enterprises, in order to increase efficiency (Keating, 1995). Globalization also has effect on the wealth and income distribution. In the year 1968, the average rate of tariffs was 36%, during this time the gini coefficient was 0. 66. Gini coefficient is an indication of the level of the income distribution inequality. In the year 1997, the average rates of the tariffs stood at 4.4% and the gini coefficient fell to 0.47. Therefore, the impact of globalization is minimizing trade protection, led to the decline in the gini coefficient to 0.47, from 0.66. Globalization also has effects on the growth of Australia. The deregulation of the financial and capital markets in Australia has made the growth rate of Australia more prone to effects of economic challenges in other countries (Martin, 2002). Due to the increased integration levels, Australia has become a victim of economic recessions and downturns of the trading countries. For instance, between the periods 1996 – 1997, Asia experienced financial crisis. In the year 1998, many Asian economies like Thailand experienced economic recession. Thailand is a major trading partner of Australia. This recession had a delayed effect on Australia; in December 1998 Australia faced economic downturns, when the economic growth was below 1%. The economic downturn of Australia is because; the crisis made the Asian countries to protect their vulnerable industries and markets by tariffs, subsidies, quotas, and local content rules (Friedman, 2008). This resulted to Australia losing its major exports markets, the effect of lose in markets led to reduction in productive capacity of Australia, which in effect stagnated economic growth. Globalization has led to increased mobility effect in Australia; this is because people are able to migrate much easily than before. Australia has benefited significantly in this migration process (Giddens, 1991). The Journal of Intercultural Studies explain that this influx has positively affected the Australian budget, even though some of the migrants are refugees. Migrants also assist in filing up the skills deficit in Australia. For instance, one in every six people working in medical profession was outside the country, overseas. Thoughts on Globalization in Australia are several and diverse. My opinion on the globalization process in the Constitutional Monarchy of Australia is both positive and negative (Stephenson and Turner, 1994). To begin with the positive aspect, Australia represents a text book example on the importance and also the benefits of the globalization process. In 1986, the country reduced its trade tariffs; this led to increased export volume, especially in the currently competitive industries like technology and manufacturing (Everdell, 2000). It is necessary to note that the wages offered in the new export industries of manufacturing and technology are 25% more in average, than wages offered by the industries serving only the domestic market. In the last 10 years, manufacturing sector has doubled its volume in Australia’s exports (Frank, 1998). Australia currently has a strong desire for more trade liberalization, especially in the agricultural industry. Australia has partnered with countries like Argentina and Brazil to increase agricultural liberalization; this will enable the opening of the European and American trade markets. It is approximated that if trade protection level is decreased by 50% worldwide; Australia will experience trade benefits which is more than $7 billion annually. Australian corporations which invest abroad are assisting those countries in creating more wealth and employment; likewise, foreign investment improves wealth and employment in Australia. For each dollar invested in Australia; 50 cents caters for wages, and 96 cents remains in the Australian economy (Hopkins, 2004). There are also certain negative aspects of the globalization issue in Australia. It has been noted that some Australian corporation engage in oppressing peasants and workers in the developing countries, especially in Asia. The Australian forestry and mining companies participate in extracting wealth from countries like Indonesia, Papua New Guinea, Iran and Jaya (Booker, 1992). These companies at times partner with the military in suppressing the local opposition. Australia supports trade liberalization especially in the agricultural sector; this trade exercise has opened up markets of poor countries. The Australia’s export to those countries has driven the local subsistence peasants and farmers out of business (Booker, 1992). Australia has also opened its market to commodities produced in countries which tolerate child labor, or prevent trade union formation. The government of Australia has also not supported efforts of including labor protection clauses and environmental clauses, in the agreements of the World Trade Organizations. The Australian government is supposed to spearhead reforms in the World Trade Organization; so as to enable the trade body be fair and equitable, to the developing nations, especially of Asia and Africa. The country also has inadequate restrictions on the activities of multinational corporations; which take the country’s wealth; the corporations also do not work towards the interests of Australia (David, 1994). In conclusion, therefore, it is seen that during the past decades, there are no winners or losers in the globalization process of Australia. In recent decades, globalization has led to major integration of the world economies through; removal of trade barriers, technological change, deregulation, and enhanced structural changes. These processes have led to improved world living standards and high economic growth rates in Australia. However, the negative effects involve; increased inequality in wealth and income distribution; and also negative impact to the environment due to increased industrialization. For the government to maintain sustainability in ecological development, it must greatly emphasize solving the environmental problems, and the poverty levels. However, the long term importance of the globalization process is much favorable; due to improved living standards, increased revenues and profitability of organizations, and improved access to goods and services. In the future, if these conditions remain constant, these globalization benefits will manifest themselves continuously. Bibliography Albrow, Martin and Elizabeth King (eds.) (1990) Globalization, Knowledge and Society London: Sage. Booker, M. (1992) Republic of Australia: What Would it Mean, Sydney: Left Book Club Co-operative Ltd David Wootton, (1994) Republicanism, Liberty, and Commercial Society, 1649-1776 (The Making of Modern Freedom series), Stanford, CA: Stanford University Press. Everdell, William R. (2000), the End of Kings: A History of Republics and Republicans (2nd ed.), Chicago: University of Chicago Press Friedman, Thomas L. (2008). The Dell Theory of Conflict Prevention, Boston: Bedford, St. Martins. Frank, Andre Gunder. (1998). Global economy in the Asian age, Berkeley: University of California Press Giddens, Anthony. (1991), the Consequences of Modernity, Cambridge: Polity Press. p. 64 Hopkins, A.G. (2004). Globalization in World History, London: Norton, pp. 4–8. Keating, P. J., (1995), an Australian Republic: The Way Forward, Sydney: Australian Government Publishing Service. Martin van Gelderen & Quentin Skinner (2002), Republicanism: A Shared European Heritage, v2, The Values of Republicanism in Early Modern Europe, Cambridge: Cambridge U.P. Robertson, Roland (1992). Globalization: social theory and global culture, London: Sage. Stephenson, M. and Turner, C., (1994). Australia Republic or Monarchy? Legal and Constitutional Issues, Sydney: University of Queensland Press. Steger, Manfred (2009). Globalization: A Very Short Introduction. New York: Oxford University Press. Read More