Globalization or Internationalization - Essay Example

Globalization has not Benefited Poor Countries With the advent of the internet and massive computing systems that are nevertheless small in physical scale, the world is becoming an ever-shrinking globe. National boundaries are becoming blurred as people in India begin working for companies in the United States and cultural groups are beginning to lose their sense of uniqueness as the world’s civilizations become more and more Westernized with the onset of full-scale capitalism. This globalization, or inter-nationalization, process has been a hotly debated topic in the media, political and social circles for the past several years. The International Monetary Fund defines globalization as “a historical process” involving “the increasing integration of economies around the world, particularly through trade and financial flows” (International Monetary Staff 2002). It is typically viewed as a necessary and unavoidable key to future world economic development. Others have denounced the process as it seems to increase the current inequalities that exist within and between nations, threatens the employment and living standards of individuals in all countries as talent is pulled from each and low-paying jobs are farmed out to others and prevents the natural social progress with which each of these countries have been involved. Although this process is unlikely to change and reversal seems impossible, considering the effects this process has on the individual as well as the nations and organizations involved, it is difficult not to agree in large part with the statement, “Whether we call it globalization or inter-nationalization, very few people, organizations or states stand to benefit as a result” (International Monetary Staff 2002). Changes in the way in which organizations conduct business have been rapid and wide-spread as the globalization concept has been introduced. It is the inherent nature of the marketplace to increase efficiency within the workplace by constantly striving to produce the most products with the least expenditure of resources. It is this concept that has driven many corporations to join in the globalization process, frequently outsourcing many of their activities and production processes to less developed countries in which this process is less expensive and requires fewer restrictions, licensing, and/or controls. (Mattoo, 2000) “Global markets offer greater opportunity for people to tap into more and larger markets around the world. It means that they can have access to more capital flows, technology, cheaper imports and larger export markets” (International Monetary Fund Staff 2002). Although the idea of globalization sounds like an ideal situation for the increased flow of goods and currencies throughout the world, as well as a possible solution for the redistribution of wealth into some of the world’s most destitute countries, “in practice, this has meant that the governments of the advanced capitalist countries, along with the I.M.F., the World Bank, and the W.T.O., have increasingly sought to force other nations to adopt market economies, privatize public companies and resources, abandon labor and environmental regulations, reduce social services, and embrace ‘free trade’ and the free movement of transnational capital” (Smith 2002). It is noted that much of the globalization effort is being organized and encouraged by the Western capitalist countries and the big businesses that have ever-increasing power in the political circles, forcing their own ideals, agendas and policies upon developing nations desperate for some help. While the International Monetary Fund (2002) argues that “globalization offers extensive opportunities for truly worldwide development,” they also admit that the increased efficiency and division of labor does not necessarily benefit everyone involved. Because of the increased ability for these larger corporations to move into smaller markets, bringing in their greater resources, greater capital and greater ability to undercut their competitors, smaller businesses are finding it more and more difficult to survive the globalized marketplace. Rather than leading to an increased diversification in the market, as well as the associated opportunities for employment and competitive salaries, globalization is beginning to decrease the ability of local citizenry to find adequate support outside of the multi-national corporation and opportunities for entrepreneurship dwindle. “As we all search for the best deal for our consumer dollars, regional superstores and on-line shopping drives our Mom and Pop shops, local manufacturing and local service companies out of business. As local businesses close their doors, the number and diversity of local jobs decrease” (Salmons & Babitsky 2002 p. 4). Despite the apparent threat to local businesses, developing nations are eager to accept the influx of big business as the international corporation operating in the right third world country can substantially increase the GNP. This interaction among nations leading to the overall economic growth of those countries has been historically demonstrated. “In the inter-war era, the world turned its back on internationalism … and countries retreated into closed economies, protectionism and pervasive capital controls. This was a major factor in the devastation of this period, when per capita income growth fell to less than 1 percent during 1913-1950. For the rest of the century, even though population grew at an unprecedented pace, per capita income growth was over 2 percent, the fastest pace of all coming during the post-World War boom in the industrial countries” (International Monetary Fund Staff 2002). This unprecedented growth was due to the increased interaction among countries in the realms of international business and financing. “Outward-oriented policies brought dynamism and greater prosperity to much of East Asia, transforming it from one of the poorest areas of the world 40 years ago. And as living standards rose, it became possible to make progress on democracy and economic issues such as the environment and work standards” (International Monetary Fund Staff 2002). Globalization offers extensive opportunities for truly worldwide development but it is not progressing evenly. Because companies expand into new markets based on how well that market can meet their own needs, this process sees some countries becoming integrated into the worldwide economy much faster than others. As would be expected, those countries that have been able to integrate are seeing faster growth and reduced poverty. “A larger number of developing countries have made only slow progress or have lost ground. In particular, per capita incomes in Africa have declined relative to the industrial countries and in some countries have declined in absolute terms” (International Monetary Fund Staff 2002). In addition, the growing power of these corporations as they come into developing nations has had a wide impact on the policies and restrictions that are created. The effect of having less restrictions in terms of humanitarian, environmental and operational procedures has led to an economy that rewards cutthroat business practices at the cost of a great deal of progress in these areas made in more advanced countries. Of course, all this change filters down to ultimately affect the individual citizens in a very real way. No longer sure of their livelihood thanks to increased competition for less jobs available, the globalized economy has made it difficult, if not impossible, for the poor to dig their way out of their poverty while increasingly helping the wealthy add to their fortunes. In addition, the jobs that do become available are not always jobs that would be open to local residents as they might require skills or knowledge that were not previously necessary. “Those with jobs know that they could lose them at any time. Downsizing by companies moves the bulk of workers into contract and temporary employment” (Salmons & Babitsky 2002). This increased competition for jobs has led to a Westernized way of living that places emphasis on fast lifestyles and a constant pressure to keep up with the latest advancements and social opportunities in order to have a chance at the best jobs. “In this world of intense competition, social networking is everything. Who you know and how they can help you is the coin of the realm. The result is that we increasingly isolate ourselves into gated communities and exclusive membership organizations” (Salmons & Babitsky 2002). Those who wish to advance in life know they must do so by sacrificing family values and traditional belief systems in order to fit in with the correct social crowd to obtain the types of employment that will provide them with the lifestyle they have been told is best. Increasingly, the world is operating upon a Western definition of the ideal life, neutralizing cultural differences in an effort to be politically correct and to avoid cultural clashes and changing the roles of family members to bring them into the capitalist ideology. The pressure to become a part of this infamous ‘rat race’ filters quickly into the society, realized by adults and then distributed down to the children. “Parents increasingly feel that they must help their kids learn how to get in the race as early as possible to increase their chances for the best jobs and a good life in the future” (Salmons & Babitsky 2002). Those who don’t fit into the model, who don’t buy into the set standard ideals or who refuse to relinquish their cultural heritage for the benefits associated with blending in, are quickly lost to the bottom of the income stack. “The gap between social classes widens as a result of this voluntary sorting” (Salmons & Babitsky 2002). We live in a world where poverty and inequality are increasing and increasing globalization has not benefited the poor countries. “Many contribute globalization to the downfall of the poor across the globe” (Pitylak, 2006). With the ill effects of globalization acutely felt in some areas of the world, it might be questioned as to why any organization, nation or individual would consider encouraging its spread. However, it could be argued that globalization has been in existence ever since the first two countries established communication with each other. The only difference now is that the advances in technology and communication have enabled business to be conducted over longer distances in less time, enabling this kind of interaction to occur regardless of geographic location. In addition, there are benefits to be gained through globalization as countries such as Asia see dramatic improvement in their GNP, which is further transferred down into the general populace. Although there is still poverty in these nations, it can be argued that the poor are living better quality lives as a result of the influx of capital and resources. The question, then, is not how to stop globalization, but rather how to make globalization work in such a way that it does not break down the cultural ideals, family structures or provide corporations with unchecked controls over developing nations even while it works to benefit the world economy. References International Monetary Fund Staff. “Globalization: Threat or Opportunity.” International Monetary Fund. (January 2002). March 5, 2009 Mattoo, Aaditya “Developing Countries in the New Round of GATS Negotiations: Towards a Pro-Active Role” World Economy, Vol. 23, No. 4, 471-489 World Bank (April, 2000) March 5, 2009 Pitylak, Ryan “Effects of Globalization on the Poor” Economics Department: University of Texas in Austin (May 4, 2006) March 5, 2009 Salmons, Jim & Babitsky, Timlynn. “Shamrocks and Nanocorps: Business Model and Technology Innovation to Bridge the Digital Divide.” Northern Montana Technology Exposition [keynote presentation]. (2002). March 5, 2009 < http://sohodojo.com/mt-tech-expo-scripted.pdf> Smith, David Michael. “The Growing Revolt Against Globalization.” Impact Press. (August / September 2002). March 5, 2009 Read More