Globalization has made it easier for nations to obtain the goods or services that they need from other countries. With the assurance that they can easily import life essentials such as food and clothing, many countries have reduced or completely stopped the manufacturing of these products. They instead focus their energy on offering financial services or medical services to other nations. One such country is India (Boudreaux 68). Most third world countries rely on developed countries for the provision of machinery and computers.
This arrangement is beneficial to all the parties involved. However, it is not stable as it appears to the naked eye. If something should happen to cause further destabilization, then all the parties involved will suffer (Weinstein 98). If, for instance, a developing country that relies on a developed country for machinery lacks the capital required for importation, many businesses in that county will suffer.
All countries are financially dependent on their trade partners. The U.S. dollar is used as the world currency in the financial market. Today, the U.S. economy is much stable than it was during the Great Depression. However, should the U.S. economy fall or destabilize, all other countries will face the consequences as well. The only nations that will be safe in such a situation are those that are fully dependent on globalization for their survival (Weinstein 165). Many of these nations are the third world countries, especially in Africa, that are believed to have nothing to offer to the world economy.
Increased Rate of Unemployment
Since the 2008 economic recession, the rate of unemployment in the U.S.A. and many developed countries has gradually gone up. Contrary to this, developing countries are experiencing a much lower rate of unemployment (Boudreaux 150). The wage policies and environmental protection laws in developing countries are much lower compared to those in the developed countries. Because of this, many corporations are investing in developing countries, hence creating more jobs. More job opportunities are lost to the developing countries due to frequent capital transfers from the developed nations (Boudreaux 154).
To solve unemployment in the developed countries, more protectionism laws need to be put in place by the developing countries (Weinstein 189). These laws will protect the workers from developing countries from exploitation by the multinational corporations that are out to make more profits by hiring cheap labor.
Developing countries are importing more products from the developed countries. The result of this is the closing down of many local industries, hence increased rate of unemployment (Boudreaux 134). One way of reducing unemployment in the developing nations is to regulate imports and encourage local production of good, thus creating more job opportunities.
Exploitation of Developing Countries
At the onset of globalization, there was the glamour of people having the chance to world oversees and conduct their business with much ease. While this has become a reality for many people, the negative impacts of the same are just beginning. Globalization has made it easier for the transferability of industries and jobs to the developing countries (Weinstein 186). All this is an attempt to lower production costs, have a lower wage bill and increase profitability in the corporation.
Today, many U.S. industries have shifted their operation to either China, India or in some parts of Asia. A similar situation is developing in Australia. China, India and Asian countries produce goods at lower costs due to availability of raw materials. They also offer cheaper labor compared to the developed countries. The companies make more profits. The profits go back to the developed countries for more development. The third world countries are left struggling economically, despite the fact that they are in charge of manufacturing (Weinstein 197). The transfer of jobs to the developing countries may be viewed as a way of creating more jobs. However, it comes at a big cost as many people are paid less than $3 per hour. With the current living standards, this is barely enough to put food on the table.
This can be solved by the developing countries putting into place better wage policies for their citizens. Before accepting to manufacture goods for a developed country, developing nations should sign contracts that call for financial benefits. The profits should also be reinvested in the developing country that production is taking place. Corporations should also be advised to pursue a more realistic approach to making profits (Casper 124). One such approach is one used by Henry Ford, where he paid his workers enough money that they could afford to purchase the same products that they were manufacturing.
The lack of government regulation is another factor that contributes to the exploitation of third world countries. The governments in these nations need to step up to defend their economies and citizens. Establishment of minimum wage rates will help the people live better lives. Government agencies need to be created to help in the regulation of multinational companies that set base in developing countries.
The observable impact of globalization is cultural erosion, especially in the developing countries. Prior to modernization and globalization, developing countries held their traditional way of life dearly. Their mode of dressing, eating habits, socialization of children, the value of placed on marriage and other cultural practices were passed from one generation to another. Today, the western culture is more prevalent in the world (Boudreaux 234). Few countries have held to their originality as many have taken up what is in fashion today.
Today, practices such as alcoholism, drug abuse, sexual immorality and divorce are at an all-time high. It is high time that traditional values are brought back to the society before moral degradation destroys us. We still have our grandparents who can play the role of reminding us what their ancestors practiced. Cultural exhibitions should be held frequently to remind the youths of their roots.
Increased Competition in the Market
Due to globalization, many countries have eased up their trade regulations. This has made it easy for external companies to penetrate local markets, posing a threat to their operations. Multinational companies are able to set base in any country they so desire due to free trade policies and availability of capital. More businesses have come up, as people try to take advantage of the cheap labor, easier modes of transportation and higher demand of good and services, both locally and internationally (Weinstein 203).
Each new business tries to outdo the other in terms of offering better products and services at affordable prices. This competition is healthy and dangerous at the same time. In a bid to lower prices, many companies are offering counterfeit products, which could be harmful to the consumers (Dollahite and Haun 156). Policies need to be put in place to regulate the number of businesses within a particular sector. This will help to control competition and reduce instances of fake and low quality products.
Increased Health Hazards
As mentioned before, globalization has caused serious environmental pollution. More industries have come up because of globalization. Many nations lack strict environmental laws. Industries have taken advantage of this fact by emitting dangerous gases into the air while manufacturing their products (Boudreaux 253). This has caused air pollution, which has in turn resulted into more air borne ailments. Today, asthma, pneumonia and respiratory diseases are at an all-time high because of breathing in polluted air. The noise made by the industries in the course of their operations has caused serious damage on the hearing of the employees and the people living close to the industries (Haldar 202).
Waterborne diseases such as cholera and typhoid are on the rise due to disposal of waste products in water sources. Many industries lack proper waste disposal methods. They dispose their waste products haphazardly, completely ignoring the dangers associated with a dirty environment. Many trees have been cut down to create space for the creation of more industries. This habit has resulted in less rain for many countries. In the end, this has resulted in soil erosion, drought and famine (Haldar 230). These events have caused the death of so many people due to starvation.
Every country needs to come up with strict environmental laws. Hefty penalties should be put in place for any individual or company that is caught polluting the environment. Social groups should involve themselves more in environmental clean-ups.
In conclusion, globalization has achieved its potential but has caused several negative effects that are doing more harm to the people. It is imperative that globalization be redesigned in such a way that its negative impacts are reduced. Bearing in mind that globalization affects important areas such as democracy, the environment and the economy, policies should be put into place to regulate it. Developing countries need to step up and offer financial and planning aid to the developing countries. There is need to restructure the current international financial system to cater for the needs of both poor and rich nations. Globalization is meant to improve the living standards of all those involved. For this to be achieved, a human face needs to be put in globalization.
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Weinstein, Michael M. Globalization : what’s new? New York: Columbia Univ. Press, 2005.