The Rise Of Globalization

Globalization has been generally used to refer to the process by which different economies and societies have become more closely integrated (Nilson, 2010). It also speaks to the growing level of interconnectedness of economies, the evaporation of borders and the convergence to an eventual single market place. Globalization has become a buzzword and is usually at the centre of contentious debates among politicians, economists and even the man on the street. This paper therefore seeks to explore the factors that contributed to the rise of globalization, the advantages and benefits that can be derived from globalization as well as some drawbacks that are associated with it.“Globalization of markets involves the growing interdependency among the

As countries liberalize their financial markets to facilitate globalization, those markets become subject to bubbles, herding behaviour, speculative attacks, and crashes (Schmukler, 2004). Also, on account of the fact that globalization encourages specialization, countries that depend on the exports of a certain product or service find themselves in grave difficulty whenever there is a fall in world demand for the said item (e.g. oil producing countries). Essentially, as countries become increasingly dependent on each other, a negative economic shock or externality in one country can quickly spread to other countries. Contrary to popular belief, globalization is not a new phenomenon but one that existed since the 19th century. As a result of world wars and subsequent capital controls, globalization saw a decline but it has seen an upturn in recent years and has returned to its prior level of prominence. This has led to dialogue, discussions and debates as to whether globalization is beneficial or if it does more harm than good. Proponents of globalization claim that there a numerous benefits associated with it such as access to a wider variety of high quality goods at low prices, increased trade, employment and productivity, as well as a more developed and integrated financial system to name a few. Detractors of globalization also put forward some compelling arguments. They highlight the growing power and control of multinationals, the loss of jobs, the destruction of domestic industries, growing inequality, the adverse environmental impact, the loss of cultural consciousness as well as the risk of contagion of financial