Effects of Globalization

Effects of Globalization

1. Economic

   • Economic Growth
     • Positive
       • Net economic profit worldwide leads to an increased development and economic standard spanning the entire world
         • Despite an increased inequality, significant improvements in national economies often correlate to a slight increase in the income of the poorest citizens and significant increases in the wealth of the average citizen.
     • Negative
       • Economic growth typically correlates to greater exploitation of the environment
         • Raw resources exported, primarily to the benefit of the processing nation which is typicaly wealthier instead of the nation with the resouces which is typically pooorer.
           • Globalization heavily aids MEDCs in juxtaposition to LEDCs, which further generates inequality on a global scale.
       • Economic growth typically correlates to a growth in equality, on a local, national or global scale
         • Those classified to be in poverty often remain in such a situation, with the wealthier residents on all scales profiting the most
   • Increase in global trade
     • Containerization and trade agreements such as those established by ASEAN facilitate an increasing global trade
     • Reduction in capital barriers such as tarrifs, causing nations to be more inclined towards global trade
       • Countries become more economically interdependent, straying away from national sustainability without foreign aid
         • This economic interdependence can aid the preventation of war as warring nations would suffer heavy economic penalties
     • Increased mobility of labour
       • People are more willing to move, which can grant them greater economic opportunities
   • Transnational Corporations
     • Workers may be predominantly in LEDCs, however since the headquarters are often in MEDCs or relatively wealthy nations, they receive the majority of profits (Leakage)
     • TNCs can often outproduce and provide a much wider variety of products than local buisnesses
       • This decimates local economies, putting citizens out of buisness and reducing national economies and their economic potential
       • The consumer has access to a better and cheaper range of goods, improving their standards of living
     • Host Government gains additional taxes from TNC and its employees
     • Increases employment via hiring of local people
       • As TNCs are so mobile, employment is unreliable
     • Investments lead to infrastructural development, improving the maintenance and range of public service as well as national development
   • The most significant economic impact of globalization is, despite its caused movement towards global economic equality, that wealthier nations continue to grow at a greater rate than LEDCs.

2. Environmental

   • TNCs often pollute the environment of LEDCs

3. Sociocultural and Political

   • Political
     • Decreasing political isolation; Nations become more interconnected. Even the DPRK is reliant on the PRC,
     • Many nations are pressured into greater democracy in their governments by the international community.
     • Increasing alignment of nations to 'blocs' of political partnerships and alliances
   • Social
     • TNCs
       • Cheaper labour incetivises TNCs however it leads to poorer conditions of work in many LEDCs
         • Due to mobility of TNCs and the desire of host nations to keep TNCs, many nations cannot alter their labour laws (to protect their citizens) as the TNC would pick a different nation in order to minimize costs
         • Many factories with dense, poor workers
         • Sweatshops
           • For example: Apple factories in China with Suicide Nets
         • Increase in child labour (I.E. India)
       • Many TNCs are fast food based, increasing obesity worldwide
     • Growth of Global Media leads to a rapid spreading of knowledge regarding major events, no matter their geographical location
       • Positive
         • Can be utilized as a movement for social progression, such as the Arab Spring, or a movement to raise awareness such as the Uyghur Labour Camp exposure
       • Negative
         • Can equally be utilized to rally terrorist support, recruit or co-ordinate terrorism.
     • Lack of borders facilitate transnational spreading of disease
   • Cultural
     • Reduction of hard borders, such as in the European Union
       • Alteration of culture
         • Change in demographics due to migration
         • Movement towards cultural homogenisation
           • Westernization, specifically in the media had significantly altered many cultures
             • Loss of local cultures
               • Thousands of languages are replaced by more common ones such as Mandarin, English or French
                 • Thousands of documents written in dead languages lost entirely, with lots of potential knowledge being eradicated.
               • Extinction of cultures
                 • Depleted global ideological diversity