The Pros and Cons of Globalization

912 Words2 Pages

Globalization can be defined as the system of interaction among the countries of the world in order to develop the global economy. It also refers to the integration of economics and societies all over the world (http://hotbabefatchicks.hubpages.com/hub/Definition-of-Globalization).

Globalization can be both advantageous and detrimental to developing countries. Some of its advantages are increased external finance, improved technology and political conformism. Disadvantages of globalization include death of small and medium businesses, loss of cultural identity and the effect of foreign policies on domestic economic development. Let us take a closer look at these consequences of globalization.

Increased external finance: Globalization implies that businesses from other countries will come invest in people and resources so as to produce their products. This type of investment means that they will bring money from their countries to buy or rent offices, purchase raw materials, hire staff, advertize etc (Stallings, 2000).

These foreign businesses lead to a substantial inflow of external finance for developing economies. External finance helps developing nations to improve areas that the government might not be delivering on properly. For example, In Lagos, Nigeria, global companies like MTN, Chevron and Coke fund local transportation. They purchase buses for the state government, pay for their maintenance and subsidize transport fares. This has helped improve commuting in Lagos from the use of dilapidated buses to cozy, functional vehicles that Nigerians can enjoy using.

Improved technology: Allowing foreign business to operate in developing countries provides an opportunity for these companies to introduce state of the art tech...

... middle of paper ...

...: http://hotbabefatchicks.hubpages.com/hub/Definition-of-Globalization. Accessed: 1st December, 2011.

Stallings, B. (2000), pp. 7-8, ‘Globalization and Liberalization: A View from the Developing Countries, U.N. Economic Commission for Latin America and the Caribbean.’ Available at: http://www.mtholyoke.edu/acad/econ/stallings.pdf. Accessed: 30th November, 2011.

Mostert, J. (2003), pp. 6-7, ‘The impact of globalisation on developing countries: ESSA Conference.’ Available at: http://www.essa.org.za/download/2003Conference/MostertJ_The%20Impact%20Of%20Globalisation%20On%20Developing%20Countries.pdf. . Accessed: 30th November, 2011.

Balakrishnan, C. (2004),’ Impact of Globalization on Developing Countries and India: The 2004 Moffatt Proze in Economics.’ Available at: http://economics.about.com/od/globalizationtrade/l/aaglobalization.htm. Accessed: 2nd December, 2011.

Open Document