Globalisation Issues - Essay Example

Globalization According to George Ritzer “it seems to me that there are two ways to think about globalization. One way is to theorize history as a process of progressive commodification of social life, which allows one to state that “globalization is not a new process”. The other way is to historicize theory and problematize globalization as a relation immanent in capitalism, but with quite distinct material (social, political, and environmental) relations across time and space” One can define the meaning of globalization in several ways but majority of the people claim that globalization is the relocation of services, commodities, individuals, beliefs and theories across various states owing to the incorporation of state’s financial system. The increase of investment and business across several states is because of globalization, creating a borderless world and one single marketplace. Although, this procedure of distribution has been sluggish, the improvement in modernization, technology and the lessening of barriers in trade has improved the speed of globalization. “Globalization is the economic and political mega-trend of the past three decades; it is still firmly in place. It involves the erosion of national barriers to free flow of goods, capital and people. The process has accelerated during the past 30 years, as international trade, cross-border investment and migration has all boomed.” (Gideon Ranchman). From the viewpoint of Australia, the occurrence of globalization is not a new concept since it has been occupied in the exchange of commodities and services when established as a colony. According to Stokes “Since 1980, the extent and speed of globalization have changed with higher trade volumes and immigration levels. These changes were caused by four major transformations. First, the evolution of new financial markets, that operated 24 hours and the floating of the Australian currency.” The second factor is the progress in technology, such as the conveniences of internet, enhanced networks for communication, easy and immediate transfer of funds and merchandise in stock markets that are foreign. Subsequently, the third reason is the appearance of recent institutional organizations such as the (WTO) World Trade Organization that has considerable authority on a number of governments, forcing them to lessen the barriers of trade among different states, and stressing them to emerge as extra oriented to sell to other countries. At last, the fourth factor contributing is the enforced implementation of some rules like the acknowledgment of rational rights for property and joint contracts for trade of different commodities that made it very problematical for the governments of different countries to devise separate financial policies. Our first main concern is to highlight that countries that have begin to start international trade like Australia have gained significantly from the process of globalization but at the same time this essay will analyze that for countries to keep on benefiting from the process of globalization, they need successful economic strategies and organization. According to Tom Conley “policy makers and commentators have long been cajoling Australian into accepting that they are part of the global economy, which means an acceptance of a whole range of “new realities” In 1980’s important reforms for trade and industry took place in Australia which turned it into a receptive economy. Among the most important thesis in favor of globalization was the acceptance of economic liberalism. “John Harvard points out that Australian economy have grown for fourteen years straight-remarkable achievements by any standard.” (Tom Conley). These modifications were put into practice because of the beginning of depression in economy in Australia. According to Kelly “In 1980’s the world economy was growing at a faster rate compared to Australia’s 2% growth rate, which was unexpectedly slow. The unemployment rate increased to over 9% revealing structural flaws in the economy” The second cause of implementation of modifications in microeconomics was to take a step in the way of free trade, reducing duties and taxes, and to make the market of labor more adaptable and accommodating. At last, the government of Hawke, desired to put into practice the economic and social incorporation with other states. The major purpose of carrying out these modifications was to improve the financial accomplishments of Australia. The basic enhancement in output and efficiency is considered as an improvement in economic performance. These modifications left an impact on the local and overseas economies, Privatization of businesses owned by the government; removal of barriers in trade on goods and the permission to overseas banks to come into the market of Australia were some distinct features. According to Borland “the reduction in tariffs also effected the agricultural markets and the taxes on some agricultural products were also liberalized.” Moreover, these amendments had an affect on the market for labor, regarding the position of trade unions plus the arrangement of and circumstances beneath various decisions. “Consequently, they lead to alteration to the formation of the structure of tax, amplified the antagonism in telecommunication and transportation and eliminated restrictions on foreign exchange markets.” (Fane 1994). As a matter of fact, previously Australia was an exceedingly globalised country, with an elevated proportion of selling overseas, contributing to Gross Domestic Product comparative to the average of the world. However, the government of Australia decided to turn away from globalization in the course of the recession, lifting the trade barriers. They in addition embraced unproductive labor and investment strategies and great levels of ownership of the state. Australia’s experimentation with removing globalization did not prove to be a huge success. From possessing the utmost income per person in the entire world in 1913, the country’s per capita fell to 15th position in 1990. The level of index for human progress plunged as a result. Yet, from the 1990, government of Australia decided to leave protectionism and lowered the trade barriers considerably. Effectual charges of defense cut down from a standard of 25% to 5%. Administration of the country also accepted an entire collection of other amendments. Now, Australia is considered as a largely receptive and well-organized country in terms of financial markets in the world. Since 1990s, because of free exchange and further financial modifications, the per capita income of Australia climbed speedily, to 55%. (Australian Bureau of Statistics) Therefore because of implementation of liberated investment and business, and a push of further significant economic changes, the position of Australia in world GDP per person are going up, reverse to eighth position and their indexes ranking for human development arrived at 4th position. Hence, Australia has without doubt benefited from the process of globalization. According to Uma Ramakrishna “There is the possibility that structural reforms to the economy paved the way for increased adoption of new technologies that may have spurred faster growth in real per capita income and output growth in higher relative to lower income states.” Immigration is an added sign of globalization as well. However, this feature is also considered as containing both advantages and disadvantages. According to Carrington “The benefits that Australia gained from migration were: large amounts of skilled labor enhancing the human capital in Australia.” Due to migration the cultural diversity of the country has also increased. While at the same time, globalization bestowed Australia with advantages it has some negative impacts as well. The unemployment rate in Australia rose since globalization brought disadvantages by means of domestic economic policy. With the balanced exchange rate and unhindered transfer of resources in and out from the nation state, government at present recognize that monetary and fiscal policy are not successful in steadying the local economy. The reliance and dependency between countries in a world that is globalized approached to the front with the worldwide financial disaster of 2007-2008. Even though it started off in a single country, the entire financial structure of the world faced the consequences. Moreover, the enlarged migration can bring about a danger of augmented terrorism. This concern turns out to be very important after the September 11 terrorist strike aimed at America. Globalization and the improvement of progressive technology that has been associated with it have escorted in the computer-generated revolution. Although rising production, it has caused cyber maltreatment and the invention of weaponry that can be utilized in computer generated attacks therefore escalating the hazard of safety for businesses and countries. The further considerable danger is store of nuclear artillery that various countries posses. According to Scollo and Winstanley “Trade liberalism also resulted in increased entry of cigarettes and tobacco into domestic economies increasing the probability of smoking related issues.” Another disadvantage is that Australia is losing its real culture by adopting the American way of life. Consequently, think about the privatization and outsourcing of a number of businesses and enterprise owned by the government. This strategy had effects on the allocation of employment among the public and the private division plus the distribution of income. Organizations owned by the government are inclined to give more jobs to people comparative to the private firms for the reason that the makers of the decision have dissimilar aims. Private industries try to increase profits whereas the same industry if administered by the government will implement a combination of competence, productivity and other public or impartial purposes. Australia after adopting the process of globalization incurred costs as well. First thinking about liberalization of the trade, the problem associated to it is that similar to any economic policy it has its losers and gainers. The profit for an economist means that gains go beyond the losses. The main people who gain from this are the customers who pay reduced prices for whatever goods they buy, whereas the major losers are the owners of the companies that shut down. Since the domestic firms are facing enlarged opposition owing to the augmented trade into the state many local businesses close down. Usually, employees who suffer the loss of their jobs are likely to possess low talents and meet inadequate chances for profitable reemployment and retraining in growing divisions of the country’s market. The people facing these situations because of the liberalization of trade have clear reasons to disagree with it and globalization correspondingly. According to Geoffrey Lawrence “ Globalization is pushing much of regional Australia away from what it knows it does best into an economic system in which it has inherent structural and cultural disadvantages.” Markets at the international level are not fair as states with excess goods may abandon them on international markets at not more than cost. Some competent firms possibly will find it hard to fight for extended periods of time beneath such circumstances. Moreover , states whose markets are mainly agricultural confront inauspicious conditions of trade like proportion of prices of export to prices of import even though their income of export is much lesser than the payments they pay for imports leading to consequently big levels of foreign debt. Industries rising or just starting out may perhaps discover it hard to develop into a reputable firm in a aggressive competitive surroundings with no protection strategies for short term implemented by the government. Greater than before local instability of economy as from international trade cycles occur as financial systems turn out to be reliant on international markets. As a result trade, staff and customers are more susceptible to recession in the markets of their partners in trading, for instance depression in the America escorts to reduced demand for exports in Australia , causing to declining incomes of exports , reduction of GDP, diminishing incomes, decrease demand of domestic goods and increasing joblessness.  One distinct advantage of globalization is that approaches like, privatization, free trade supports trade whereas at the same time encourages peace in the world by eradicating the motivation for states to engage in war. According to Anna lindh “globalization has made us more vulnerable. It creates without borders, and makes us painfully aware of the limitations of our present instruments and of politics to meet its challenges” References: RITZE, G., & ATALAY, Z. (2010). Readings in globalization: key concepts and major debates. Chichester, West Sussex, U.K., Wiley-Blackwell. Gideon Ranchman “Is globalization on the retreat in 2011” published January 3.2011 Columnists Stokes, A.R. (2000), 'The Nature of the Global Economy and Globalization’, Economics, Vol 36, No 3, October. CONLEY, T. J., & DISCIPLINE OF POLITICS UNIVERSITY OF ADELAIDE. (2004). Globalisation and Rising Inequality in Australia: Is Increasing Inequality Inevitable in Australia? Adelaide, University of Adelaide. http://hdl.handle.net/10072/2278. KELLY, R. M. (2001). Gender, globalization, and democratization. Lanham, MD, Rowman & Littlefield Publishers. George Fane “ APEC: Regionalism, globalism or obfuscation?” agenda, volume 2, number 4,1995, Australian Bureau of Statistics, (2000), Australian National Accounts, 5206.0. GRAY, I. W., & LAWRENCE, G. (2001). A future for regional Australia: escaping global misfortune. Cambridge, Cambridge University Press. CARRINGTON, K., & PEREIRA, M. (2009). Offending youth: sex, crime, and justice. Annandale, N.S.W., Federation Press. Scollo, M.M. and M.H.Winstanley (eds) 2008, Tobacco in Australia: facts and issues, last modified 21 Jul 2009,  BORLAND, J., & WILKINS, R. (1994). Earnings inequality in Australia. Parkville, Vic, Dept. of Economics, University of Melbourne. RAMAKRISHNAN, U., & CERISOLA, M. (2004). Regional economic disparities in Australia. [Washington, D.C.], International Monetary Fund. Anna lindh, speech by FM Anna Lindh in the Helsinki Conference “searching for global partnership” 4. December, 2002 Read More