Global is at Ion Asignment Final

8/3/2019 Global is at Ion Asignment Final

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TABLE OF CONTENT

Topic: .....................................................................................................................3

Introduction ..........................................................................................................3

Historical Development ........................................................................................5

Definition of Globalization ...................................................................................7

Globalization and Its Characteristics ................................................................ 10

Improved Technology in Transportation and Telecommunications ............................ ...................... 10

Movement of People and Capital ...................................................................................................... 10

Diffusion of Knowledge .................................................................................................................... 11

Non-Governmental Organizations (NGOs) and Multinational Corporations ........................... ........ 11

K ey players in the Globalization Process: ......................................................... 12

Is Globalization a Good Thing? ......................................................................... 13

The merits of globalization are discussed below. .............................................. 13

R apid Economic Development .......................................................................................................... 13

More of Investment ........................................................................................................................... 13

More of Employment ........................................................................................................................ 14

Increase Communication and Transportation Accessibilities ........................... ........................... ..... 15The Government becomes more efficient .......................................................................................... 16

New Inventions and Discoveries ....................................................................................................... 14

The Consumer Benefits ..................................................................................................................... 15

Cultural linkage ................................................................................................................................ 15

Strengthening of Democracy ............................................................................................................. 16

One World ......................................................................................................................................... 16

The demerits of globalization are discussed below: .......................................... 17

With the removal of trade barriers, structural unemployment may occur in the short term. ............. 17

Increased domestic economic instability from international trade cycles, as economies becomedependent on global markets. ............................................................................................................ 17

International markets are not a level playing field ............................................................................ 17

Cultural Failure ................................................................................................................................ 20

Social Disruption .............................................................................................................................. 19


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Spiritual Disruption .......................................................................................................................... 19

Gender Inequality ............................................................................................................................. 20

Pollution and other environmental problems .................................................................................... 19

Access to External Funds .................................................................................................................. 18

Pressure to increase protection during the Global Financial Crisis ............................ ...................... 18

Developing Countries and Globalization ........................................................... 21

Globalization and Guyana .................................................................................. 25

Discussion and Conclusion ................................................................................. 26

References ........................................................................................................... 28


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Topic:

Critically analyze the merits and demerits of globalization with specific emphases on developing

countries.

Introduction

G lobalization has integrated the product and financial markets of economies around the world

through the driving forces of trade and capital flows cross borders. One of the main debates on

globalization is the effect of growing economic integration on income distribution. The anti-

globalization movement argues that globalization is widening the gap between the haves and the

have-nots ( Mazur, 2000) . The pro-globalization position claims that the current wave of

globalization since the 1980s has actually promoted economic equality and reduced poverty

( Dollar and Kraay, 2002 ).

The world is more interdependent now than ever before .Multinational companies manufacture

products across many countries and sell to consumers across the globe. Money, technology and

raw materials have broken the International barriers. Not only products and finances, but also

ideas and cultures have breached the national boundaries.

Laws, economies and social movements have become international in nature and not only the

G lobalization of the Economy but also the G lobalization of Politics, Culture and Law is the order


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of the day. The formation of G eneral Agreement on Tariffs and Trade ( G ATT), International

Monetary Fund and the concept of free trade has boosted globalization.

Today, despite the perception of increasing globalization, the international financial system is far

from being perfectly integrated. There is evidence of persistent capital market segmentation,

home country bias, and correlation between domestic savings and investment. The recent

deregulation of financial systems, the technological advances in financial services, and the

increased diversity in the channels of globalization make a return to the past more costly and

therefore more difficult. Financial globalization is unlikely to be reversed, particularly for partially integrated economies, although the possibility of that happening still exists.

Some of the issues that will be dealt with in this paper are the definition of globalization,

examine and discuss the merits and demerits of globalization with focus on developing countries

and conclude with a few remarks on the impact globalization have on developing countries.


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Historical Development

G lobalization has been a historical process with fade and flows. During the Pre-World

War I period of 1870 to 1914, there was rapid integration of the economies in terms of trade

flows, movement of capital and migration of people. The growth of globalization was mainly

led by the technological forces in the fields of transport and communication. There were less

barriers to flow of trade and people across the geographical boundaries. Indeed there were no

passports and visa requirements and very few non-tariff barriers and restrictions on fund flows.

The pace of globalization, however, decelerated between the First and the Second World War.

The inter-war period witnessed the erection of various barriers to restrict free movement of

goods and services. Most economies thought that they could thrive better under high protective

walls. After World War II, all the leading countries resolved not to repeat the mistakes they had

committed previously by opting for isolation. Although after 1945, there was a drive to

increased integration; it took a long time to reach the Pre-World War I level. In terms of

percentage of exports and imports to total output, the US could reach the pre-World War level of

11 per cent only around 1970. Most of the developing countries which gained Independence

from the colonial rule in the immediate Post-World War II period followed an import

substitution industrialization regime. The Soviet bloc countries were also shielded from the

process of global economic integration. However, times have changed. In the last two decades,

the process of globalization has proceeded with greater vigor. The former Soviet bloc countries

are getting integrated with the global economy. More and more developing countries are turning

towards outward oriented policy of growth. Yet, studies point out that trade and capital markets

are no more globalized today than they were at the end of the 19 th century. Nevertheless, there

are more concerns about globalization now than before because of the nature and speed of


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transformation. What is striking in the current episode is not only the rapid pace but also the

enormous impact of new information technologies on market integration, efficiency and

industrial organization.

The animosity surrounding the debate on globalization requires that a holistic approach be

adopted when analyzing this issue. G lobalization is a prismatic phenomenon, which should be

looked at in all its manifestations and from different angles.

G lobalization has become an expression of common usage. While to some, it represents a

brave new world with no barriers, for some others, it spells doom and destruction. It is,

therefore, necessary to have a clear understanding of what globalization means and what it stands

for, if we have to deal with a phenomenon that is gathering momentum.


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Definition of Globalization

G lobalization is a term that has become very popular and used in many different contexts in the

literature. The definition of globalization should be distinguished from terms like

internationalization, regionalization and liberalization.

In most of the definition of globalization that is found in the literature, the process of

globalization is seen as the breakdown of borders between countries, governments, the economy

and communities. In the financial markets it is also the blurring of borders between different

markets.

(O Brien 1992) also links the definition of globalization to geographical borders. OBrien

distinguishes between national, international, offshore and global. He states that national

transactions take place between businesses in the same country. International activities are

activities that take place between different countries. International also means trade that does not

take place in a national country. Multinational describes activities that take place in more than

one country. Whereas global is a more advanced stage of integration that combines elements of

both international and multinational between countries. A truly global activity does not know any

internal borders. It also gives limited recognition because of the fact that the country is irrelevant

when it comes to global activities.

(Redding 1999) defines globalization as the increasing integration between the markets for

goods, services and capital. Reddings definition also links globalization to the breakdown of

borders.


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The United Nations defined globalization in a number of different ways. When used in an

economic context, it refers to the reduction and removal of barriers between national borders in

order to facilitate the flow of goods, capital, services and labor.

Tom G . Palmer of the Cato Institute defines globalization as "the diminution or elimination of

state-enforced restrictions on exchanges across borders and the increasingly integrated and

complex global system of production and exchange that has emerged as a result.

Thomas L. Friedman popularized the term "flat world", arguing that globalized trade,

outsourcing, supply-chaining, and political forces had permanently changed the world, for better

and worse. He asserted that the pace of globalization was quickening and that its impact on

business organization and practice would continue to grow.

Ben and Hall posit that G lobalization may be seen as a natural outgrowth of the economic

policies applied under the IMF/World Bank, sponsored economic stabilization and structural

adjustment programmes implemented during the economies of the developing countries towardsincreased integration into the global economy.

For purposes of simplicity, the term globalization means integration of economies and societies

through cross country flows of information, ideas, technologies, goods, services, capital, finance

and people. Cross border integration can have several dimensions cultural, social, political and

economic. In fact, some people fear cultural and social integration even more than economic

integration. The fear of cultural hegemony haunts many. Limiting ourselves to economic

integration, one can see this happen through the three channels of (a) trade in goods and services,


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(b) movement of capital and (c) flow of finance. Besides, there is also the channel through

movement of people.


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Globalization and Its Characteristics

G lobalization is the process of increased interconnectedness among countries most notably in the

areas of economics, politics, and culture. The idea of globalization may be simplified by

identifying several key characteristics:

Improved Technology in Transportation and Telecommunications

What makes the rest of this list possible is the increasing capacity for and efficiency of how

people and things move and communicate. In years past, people across the globe did not have the

ability to communicate and could not interact without difficulty. Nowadays, a phone, instant

message, fax, or video conference call can easily be used to connect people. Additionally,

anyone with the funds can book a plane flight and show up half way across the world in a matter

of hours.

Movement of People and Capital

A general increase in awareness, opportunity, and transportation technology has allowed for

people to move about the world in search of a new home, a new job, or to flee a place of danger.

Most migration takes place within or between developing countries, possibly because lower

standards of living and lower wages push individuals to places with a greater chance for

economic success. Additionally, capital is being moved globally with the ease of electronic

transference and a rise in perceived investment opportunities. Developing countries are a popular

place for investors to place their capital because of the enormous room for growth.


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Diffusion of Knowledge

The word diffusion simply means to spread out, and that is exactly what any new found

knowledge does. When a new invention or way of doing something pops up, it does not stay

secret for long. A good example of this is the appearance of automotive farming machines in

Southeast Asia, an area long home to manual agricultural labor.

Non-Governmental Organizations (NGOs) and Multinational Corporations

As global awareness of certain issues has risen, so too has the number of organizations that aim

to deal with them. So called non-governmental organizations bring together people unaffiliated

with the government and can be nationally or globally focused. Many international N G Os deal

with issues that do not pay attention to borders such as global climate change, energy use, or

child labor regulations.

As countries are connected to the rest of the world they immediately form market. As more and

more markets are opening up, business people from around the globe are coming together to

form multinational corporations in order to access these new markets. Another reason that

businesses are going global is that some jobs can be done by foreign workers for a much cheaper

cost than domestic workers.


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K ey players in the Globalization Process:

y Multinational Enterprises that carry out business across national boundaries.

y The World Trade Organization (WTO) through which international trade agreement are

negotiated and enforced.

y The World Bank and the International Monetary Fund (IMF) which are means to assist

the government in achieving development through the provisions of loans and technical

assistance; and

y National G overnment who together with these International Institution are instrumental in

determining the outcome of G lobalization.


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Is Globalization a Good Thing?

There was heated debate about the true effects of globalization and if it really is such a good

thing. G ood or bad, though, there isn't much argument as to whether or not it is happening. Let's

look at the merits and demerits of globalization, and you can decide for yourself whether or not it

is the best thing for our world.

The merits of globalization are discussed below.

Economic Factors

R apid Economic Development

G lobalization makes all persons sincere and active in their work. Being part of the game of

competition, they will try to produce more and sell more. The basic principle of globalization is

that each one will try to prove that he is better than others. As a result, economy will develop fast

and the economic development of the country will be expedited.

More of Investment

Free economy will attract more of investment. Rich and developed countries will invest their

capital and establish industries in poor and backward countries. As more money is poured in to

developing countries, there is a greater chance for the people in those countries to economically

succeed and increase their standard of living.


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More of Employment

More jobs will be created in developing countries. Individuals with skill and good education will

be able to find employment in different industries and factories; some of them may open their

own business.

Increase in the Efficiency of Domestic companies

The domestic companies, as a result of competition with multinational corporations, will be able

to increase their efficiency and successfully compete at the international level. G lobal

competition encourages creativity and innovation and keeps prices for commodities/services in

check.

Technological Factors

New Inventions and Discoveries

As a result of-globalization, there takes place marked change in the nature and character of man.

Man thinks of new ideas and searches for new paths. All this helps him make new inventions and

discoveries. In turn, this contributes to qualitative increase in knowledge and new products.

Developing countries are able to reap the benefits of current technology without undergoing

many of the growing pains associated with development of these technologies.


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Increase Communication and Transportation Accessibilities

Increased flow of communications allows vital information to be shared between individuals and

corporations around the world, results in greater ease and speed of transportation for goods and

people.

S ocial Factor

The Consumer Benefits

G lobalization weakens the monopoly business; as a result, the consumer has several choices in

the market. The producers are required to produce better things to attract consumers. Today

producer make products based on customers needs and wants.

Cultural Factor

Cultural linkage

As globalization breaks national barriers, it becomes easier for the culture of one country to

reach other countries. As a result of exchange of values and ideas among nations, a new culture

is likely to grown. The cultural division among borders has begun to weaken.


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Political Factor

Strengthening of Democracy

As a result of globalization, democracy will be strong and solid. Democracy mainly means

political freedom, and political freedom has little meaning if there is no economic freedom. As

globalization gives economic freedom to people, it helps them take active part in the democratic

process.

The Government becomes more efficient

In countries where bureaucracy is generally slow, cunning and corrupt. The decision-making is

unduly delayed. But, due to liberalization and globalization, the government is almost forced to

change its style of work, and become more active and competitive. G overnments are able to

better work together towards common goals now that there is an advantage in cooperation, an

improved ability to interact and coordinate, and a global awareness of issues.

One World

G lobalization is the right step towards the establishment of one world. It breaks national barriers

and binds all nations by the bond of friendship, cooperation and integration. In course of time, it

is hoped, there will be one people, one government, and one world. G lobalization will help

materialize the ideal- 'the whole mankind is one.'


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The demerits of globalization are discussed below:

Economic Factors

With the removal of trade barriers, structural unemployment may occur in the short term.

This can impact upon large numbers of workers, their families and local economies. Often it can

be difficult for these workers to find employment in growth industries and government assistance

is necessary. Increased flow of skilled and non-skilled jobs from developed to developing nations

as corporations seek out the cheapest labor. Outsourcing, while it provides jobs to a population in

one country, takes away those jobs from another country, leaving many without opportunities

Increased domestic economic instability from international trade cycles, as economies become

dependent on global markets.

This means that businesses, employees and consumers are more vulnerable to downturns in the

economies of trading partners, eg. Recession in the USA leads to decreased demand for exports,

leading to falling export incomes, lower G

DP, lower incomes, lower domestic demand and risingunemployment. As global market opens corporate influence of nation-states far exceeds that of

civil society organizations and average individuals which can result n mistrust between nations

and civil society.

International markets are not a level playing field

Countries with surplus products may dump them on world markets at below cost. Some efficient

industries may find it difficult to compete for long periods under such conditions. Further,

countries whose economies are largely agricultural face unfavorable terms of trade whereby their

export income is much smaller than the import payments they make for high value added


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imports, leading to large Cash Available for Debt Service and subsequently large foreign debt

levels.

Access to External Funds

Large Western-driven organizations such as the International Monetary Fund and the World

Bank make it easy for a developing country to obtain a loan. However, a Western-focus is often

applied to a non-Western situation, resulting in failed progress.

Pressure to increase protection during the Global Financial Crisis

During the global financial crisis and recession of 2008-2009, the impact of falling employmentmeant that protection pressures started to rise in many countries.

Technological Factors

Developing or new industries may find it difficult to become established in a competitive

environment

In developing countries where there are no short-term protection policies by governments,

according to the newborn industries argument. It is difficult to develop economies of scale in the

face of competition from large foreign Transnational Corporations. This can be applied to

newborn industries or developing economies.


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S ocial Factors

Social Disruption

G lobalization is extending the gap between the rich and poor communities and also between the

nations causing regional insecurity and a fear of exhaustion and extinction of resources and shift

of manpower from less developed to more developed geographical area. G rowing demands have

also made people to grow rich by adopting unfair means leading to dissolution of families and

communities, health and also in education. This has given rise to regional wars and international

terrorism, crippling and self-criticism (Ehrenfeld, 2003).

Spiritual Disruption

The world is becoming materialistic and hence humane of human sprits is lost causing loss of

environmental wisdom (Ehrenfeld, 2003).

Pollution and other environmental problems

Decreases in environmental integrity as polluting corporations take advantage of weak regulatory

rules in developing countries. Most companies fail to include these costs in the price of goods in

trying to compete with companies operating under weaker environmental legislation in some

countries. There may also be a greater chance of disease spreading worldwide, as well as

invasive species that could prove devastating in non-native ecosystems.


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Cultural Factors

Cultural Failure

Although different cultures from around the world are able to interact, they begin to meld, and

the contours and individuality of each begin to fade.

Gender Inequality

The most critical of the issues related to womens poverty is the many forms of violence against

women. One aspect of this deserves urgent attention is the trafficking of women and girls.

During the past decade, this form of trafficking has become an issue of growing concern in this

region, especially in developing countries. Women and girls who are victims of this international

trade are at an increased risk of further violence, as well as unwanted pregnancy and sexually

transmitted infection, including infection with the human immunodeficiency virus (HIV) which

cause the acquired immunodeficiency syndrome (AIDS).

Political Factors

The current leaders and businessmen of the developing world particularly in the socialist,

communist, dictatorial and poor countries protect their interest and are not keen on foreign

investment in their economies. However, protect inefficient government and public sector

employees


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They do not agree easily with globalization. They have a vested interest. Currently they need not

efficient, skilled and need not have to compete with the best in the World.

Developing Countries and Globalization

The developing countries are those countries who share a common colonial history. While many

of the developing countries have colonial histories they differ with respect to variation in the

length of times since they won independence from their colonizers e.g. most Latin American

countries won independence from their colonizers in the early 19 th century and most of Africa

after Second World War, their routes to independence vary thus producing different political

alliances and political forces and or outcomes.

A close relationship is noted with respect to former colonies and an inability of those countries to

develop economically, and thus to a great extent socially. The era of colonialism made Neo-

colonialism possible, where although counties have gained their formal independence they are

still economically dependent on their formal colonizers. A monetary criteria was expressed in

terms of gross national product per capita per annum to categories the developing countries that

was used by the World Bank thus most of these countries are poor by international standards of

the World Bank, the majority being low income or lower middle income categories.

Looking at the economic dimensions of globalization one can see that when it comes to receiving

income, trade agreements are one of the main sources but it doesnt really benefit the developing

countries. The trade agreements, such as (TRIPS) Trade Related Intellectual Property Rights,


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(TRIMS) Trade Related Investments Measures, the ( G ATS) G eneral Agreements on Tariffs in

Service and organization like the (WTO) World Trade Organization, further deprive developing

countries. G lobalization economically speaking entails the integration of world trade and

financial markets, but given that developing countries are not really catching up with the

advanced economies.

It is well known that countries opening up their economies to capital movements as the result of

liberalization processes can benefit from these movements. The most striking advantage in this

respect is that globalization enables capital to move from the developed countries, in which thereturn on capital is low, to developing countries in which the average return on capital is high.

Capital movements of this type increase world product, and can thereby increase overall welfare.

Developing countries as a group have become more integrated into the world economy in the

past twenty years as a result of the parallel processes of globalization and liberalization. There

were also important changes in the allocation of capital flows among developing country regions

that reinforced trends in trade. During the 1980s, Latin America and the Caribbean in particular

were starved for funds from the private sector, leading to an increased role for the multilateral

agencies. East and Southeast Asia, in contrast, continued to have access to private funds. In the

1990s, Latin America and the Caribbean regained access to private finance and Eastern Europe

also became an active borrower, sharing the expanding pie with East/Southeast Asia. Sub-

Saharan Africa and South Asia continued to draw primarily on official sources, but this resulted

in to low and declining shares of total resource flows.


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Other insights about the nature of globalization can be obtained by noting with whom developing

countries trade and from where investment comes. Based on data for the first half of the 1990s, a

clear distinction can be made (Stallings and Streeck, 1995). Asian developing countries mainly

traded among themselves, and with Japan, and a growing share of their investment also came

from within the region. In Latin America, in contrast, trade and investment were heavily

weighted toward the United States, especially in the northern tier of countries. In Africa and

Eastern Europe, there was a focus on Western Europe.

What we referred to as the "tetrahedron" meant that different developing regions were tied intothe global economy in different ways through their with main trading and investment partners.

Since the respective industrial countries featured different "models" of capitalism, this led to

somewhat different policies in the developing countries themselves. G rowth rates of the

industrial countries also differed. In the 1980s and early 1990s, these differences contributed to

the great economic dynamism in the Asian region, but the collapse of the Japanese economy

exacerbated the later problems of its Asian neighbors, and the high level of interaction within the

region propelled the contagion effect once the crisis there began in 1997. The lagging U.S.

economy, which had appeared to be a drag on Latin America in the 1980s and early

However, the advocates of globalization and Liberalization are finding it difficult to make good

their promise to deliver long-term growth or to provide higher standards of living for developing

countries. This point has been echoed by analysts, such as (Rodrik 1997), who argues that

insufficient attention has been given to the impact of globalization and trade liberalization on

wages and employment. This dissatisfaction of developing countries with their share in the


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benefits of globalization is becoming increasingly evident. At the turn of the century, there is

general concern that the Washington Consensus is not delivering on its promises and that the

developing world is not sharing in the benefits of globalization. This view was strongly

articulated at the Annual Meetings of the Inter-American Development Bank in Brazil in March

2002. Small countries are unable to influence the imperatives of present-day negotiations or

change the philosophy of the market. These demand that countries, regardless of size, embark on

programmes of liberalization to be taken seriously in negotiations with large countries or within

any economic bloc of which they are a part. Indeed, developing countries have found it is

impossible to be integrated into the international environment unless their economic andfinancial systems are liberalized. Liberalization has become a precursor to globalization, which is

a process with its own technologically driven momentum, so that liberalization too is being

propelled forward. However, this process, though inevitable, is fraught with hurdles for

developing countries and more especially for small countries.

In order to create better economic relations globally, international lending agencies must work

with developing countries to change how and where credit is concentrated as well as work

towards accelerating financial development in developing countries. There is a need for social

respect for all persons worldwide. The Economic Commission of Latin America and the

Caribbean suggests that in order to ensure such social respect, the United Nations should expand

its agenda to work more rigorously with international lending agencies. Despite their title,

international lending agencies tend to be nation-based. The ECLAC suggests that international

lending agencies should expand to be more inclusive of all nations and they propose that there is

a need for universal competitiveness. Key factors in achieving universal competition is the


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spread of knowledge at the State level through education, training and technological

advancements. Economist, Jagdish Bhagwati, also suggests that programs to help developing

countries adjust to the global economy would be beneficial for international economic relations.

Globalization and Guyana

G uyana is one of the most highly indebted nations. Yet, the theme of increasing poverty within

this poor nation is not a part of the narrative of the proponents of globalization when they preach

about its so-called benefits. As globalization intensifies, the gap between per capita incomes in

rich and poor countries has widened (Cutter et al., 2000). Moreover, there is not any strategy that

has yet emerged to help G uyana reap any benefits from globalization that is because

globalization is about profits for the globalizers. G uyana continues to succumb to the dictates of

the IMF and the World Bank.

In the guise of attempting to reclaim its debts, the World Bank and the IMF developed a

Structural Adjustment Program (SAP) by playing an increasingly important role in regulating the

economy of G uyana without pausing to consider the staggering adjustment cost in terms of

soaring unemployment and social distress facing the country.

In G uyana from the 1980s, the trade liberalization schemes imposed by the IMF and the World

Bank make sure that its forest and mining sectors are opened to exploitation by foreign investors.

A number of foreign investors acquired logging and mining concession rights to operates in


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G uyana under the terms of a IMF agreement. G uyana now offers multinationals companies a ten-

year exemption from all taxes.

By 1990,G

uyana moved toward a free market economy under the direct guidance of the IMF

and the World Bank, which provided for a three year Enhanced Structural Adjustment Facility

(ESAF). After the ESAF ended in December 1993, it was again extended. In September 1996,

the ESAF became the centerpiece of the IMF's strategy to help low income countries including

G uyana, where the IMF and the World Bank control the government economic direction.

Like many of these poor nations, G uyana has adopted the Investment Plan initiated by the World

Bank, which grants generous fiscal incentives to lure multinational corporations into the country.

G uyana's drive for foreign investments was based, almost solely, on the liquidation of its natural

resources namely its rainforest for commercial logging and mining.

Discussion and Conclusion

Based on the prospect of developing countries it can safely say that the demerits of globalization

overweight the merits of globalization. From the discussion of the merits and demerits of

globalization it is clear that countries and regions taking active part in the process of

globalization are in a more advantageous than countries trying to resist the process. It is also

clear that no quick fixes exist for development problems of developing countries. (Moore 2002)

indicates that 1.2 billion people in the world are living on less than a dollar and another 1.6

billion of the world population is living on between one and two dollars per day.


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It can also argue that the impact of globalization on developing and developed countries differed.

Although globalization has contributed to a significant increase in average economic growth, it

has showed that this was not spread evenly between less developed countries. The richest quarter

of the world population income grow six times while the poorest quarter income grows three

times. It can also debate that the process of globalization has led to high level of unemployment

in developing countries. (Brittan 1998) states that the demand for low skilled worker had

declined due to technology development and the international demand for workers with skill has

increased.

In conclusion, the developing countries face special risks that globalization and the market

reforms that reflect and reinforce their integration into the global economy, will worsen

inequality, at least in the short run, and raise the political costs of inequality and the social

tensions associated with it. The risks are likely to be greatest in the next decade or so, as they

undergo the difficult transition to more competitive, transparent and rule-based economic

systems with more widespread access to the assets, especially education, which ensure equal

access to market opportunities. During that transition, more emphasis on minimizing and

managing inequality, on making the market game as nearly as possible a fair one, would

minimize the real risks of a backlash. A backlash would be a shame, as in a bad twist, it would

undermine the benefits that more open and more globally integrated economies and polities can

deliver to all the people of the developing world. It is also argued that globalization offers a new

opportunity for knowledge dissemination, but this does not mean that all the nations and

institutions will equally benefit from it. On the contrary, it seems that the institutions that have


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managed to benefit most from globalization are those that already are at the core of scientific and

technological advance.

Other commentator has argued that there is a very serious case not against globalization, but

against the particular version of it imposed by the world's financial elites. The brand currently

ascendant needlessly widens gaps of wealth and poverty, erodes democracy, seeds instability,

and fails even in its own test of maximizing sustainable economic growth. The gap between rich

and poor countries has widened considerably.

In order to create better economic relations globally, international lending agencies must work

with developing countries to change how and where credit is concentrated as well as work

towards accelerating financial development in developing countries. There is a need for social

respect for all persons worldwide.

References

1. Amartya Sen, The American Prospect, How to judge globalism: global links have spread

knowledge and raised average living standards. But the present version of globalism

needlessly harms the world's poorest, 2002 v13 i1 pA2(5) .

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