Is Globalization Good or Bad?

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Is Globalization Good or Bad?

Affecting the economies of every nation on earth, globalization is a topic that’s on everyone’s lips these days. But did you know that it’s a process that dates back to 1492?
A working paper created by Kevin H. O’Rourke and Jeffrey G. Williamson for the National Bureau of Economic Research was published in 2002. They said that many historians worldwide believe that significant events in globalization started when Christopher Columbus set sail in 1492 and found the Americas. It was followed by the voyage of Vasco de Gama in 1498 that disrupted the spice trade monopoly of Venetian and Arab traders when he sailed around Africa.
Other historians believe that globalization started long before the first voyage of Christopher Columbus. For them, it began when people from Africa moved to developed countries around the world. Whether they traveled long or short distances, these people, either migrants or merchants, shared their products, customs, and ideas with the people they interacted with within their destinations. The newcomers and the residents of the lands they found borrowed, adapted and melded their cultures.
According to the paper, the most credible opinion regarding the beginning of globalization is what happened during the 19th century, a time when international trade made an economic impact on the global economy.
Globalization: Nothing New Under The Sun
Whichever way you look at it, globalization is not a novel idea. It’s been around for millennia. Merchants of old traveled the globe to find commodities in developing countries that during those times were rare, like gold, spices, and salt, that they could sell for high prices.
The Industrial Revolution of the 19th century brought about developments in transportation and communication, increasing free trade across borders and opening/removing borders in many places, giving poor countries fair access to the global marketplace.
In recent times, business expansion became the impetus for the unprecedented growth of globalization.
What Is Globalization?
A quick Google search for the term ‘globalization’ will produce an array of definitions. Here’s a look at some of them:

  1. Globalization is a process wherein organizations or businesses build influence internationally or start their operation in various locations worldwide.

  2. Globalization can mean the merging of national economies through technology, migration of labor force, the flow of capital, investment, and trade.

  3. Globalization can also mean the dissemination of technology, values, and practices that have a worldwide impact on many people’s lives.

  4. Globalization can be a process that is driven by different needs and purposes. It increases the flow and exchange of culture, information, people, money, services, and goods across geographical borders.

What Are The Benefits Of Globalization?
Nobel Prize winner Amartya Sen, an economist, said globalization brought economic benefits to many developing countries and provided cultural and scientific enrichment worldwide. The United Nations predicted that poverty could potentially be eradicated by globalization and global trade.
Globalization has many benefits, and some of the more important ones include:

  • Globalization comprises the integration of cultures, information technology, investment, and international trade.

  • Corporations acquire a competitive advantage through globalization. It helps them lower their costs of operation.

  • Governments worldwide incorporate free-market economic systems due to foreign trade agreements and their economic policies.

  • Globalization has increased awareness among global consumers of different opportunities for investment, economic trends, and new products.

  • Socially, globalization provides populations around the world with better interconnectedness. Culturally, it promotes the increase in the exchange of values and ideas.

  • Globalization enables developing countries to draw level to industrialized countries via economic growth and expansion, diversification, and manufacturing.

  • It gives the outsourcing industries a big boost, bringing technology and more jobs to other countries.

  • It encourages many companies to specialize, increase their capital, improve their research and development efforts, and help them innovate.

  • It provides more employment opportunities, especially in the export and import sectors.

  • The household income gains an increase through globalization. It reduces inflation rates and increases workers’ take-home pay because the cost of consumption is lower.

  • Globalization allows many goods to be more affordable and available to more parts of the world.

  • It helps improve productivity, cut back gender wage discrimination, give more opportunities to women and improve working conditions and quality of management, especially in developing countries.

These are the most important benefits of globalization and global trade. It is still not an exhaustive list, but it touches on the essential changes that globalization brings to the global community. While the benefits are many, globalization likewise has its disadvantages.
What Are The Drawbacks Of Globalization?
Joseph Stiglitz and Chang Ha-Joon, both economists from Columbia University and the University of Cambridge, respectively, think globalization causes inequality. In 2007, the International Monetary Fund (IMF) said that foreign capital investment in other countries and introducing new technology might have brought about inequality levels.
Some developed countries like France, for example, do not trust globalization. They believe that globalization makes employers take jobs away from them and move them to overseas locations where labor costs are cheaper.
Here are more disadvantages:

  • Globalization is a threat to national and local economies. Global companies coming into emerging and developing nations have the tendency to impose their ways, practices, and culture onto the target nations.

  • It can lead to the implementation of foreign concepts and ideas. In countries where Islamic culture dominates and other countries with different practices and beliefs, imposing Western culture and ideas could be detrimental. In some cases, it can lead to the question of national identity.

  • Although globalization exposes other languages to more people, it can also cause some minority languages to disappear.

  • Automation and technological advancements displaced workers, leaving them unemployed.

  • As more cities, communities, and countries become industrialized due to globalization, it also brought about the loss of biodiversity, growth of the local population, and climate change.

  • Free trade poses more significant risks to small, family-owned, and private companies competing in the global market. They have to face stiff competition from companies with huge resources.

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