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An extensive, 1000 word essay on The Effects of Globalisation in the current Global Economy

An extensive, 1000 word essay on The Effects of Globalisation in the current Global Economy

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Published by serenit-y
This Essay, outlines the deep and extensive advantages and repacautions of globalisation, in the current global enviroment. It uses a wide range of past and current examples to make it's arguement. As well a recommendation to stem to exploitation of Capitalism.

Note - This work is based on extensive research, but does not seek to plagurise in any way.
This Essay, outlines the deep and extensive advantages and repacautions of globalisation, in the current global enviroment. It uses a wide range of past and current examples to make it's arguement. As well a recommendation to stem to exploitation of Capitalism.

Note - This work is based on extensive research, but does not seek to plagurise in any way.

More info:

Categories:Types, School Work
Published by: serenit-y on Feb 18, 2009
Copyright:Attribution Non-commercial

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04/06/2014

 
Global BusinessEnvironment
Personal Project on GlobalisationBy – John Fasheyiku, UBU No - 05011482
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The effects of globalisation, GBE – 2008
T       o       p     i       c     
Duetothe recentsurgeininflationworldwideandtheimpactofsub-primeMortgagecrisisontheglobaleconomy,countrieshaveintensifiedtheclaimAgainstthe positiveinfluenceofglobalisation.Criticallyevaluatetheargumentsforandagainstglobalisationanddiscussifsuchclaimsaresustainable.
 
 The Foremost argument for globalisation is the increased access todeveloping countries to foreign investments, information technology and anoutlet for their trades,China, heralded as the epitomistic result of globalisation, has seen an average of 8% growth due to Trade and FDI, and 9.1% in 2003, supported by a 37.1%increase in total import and export volumes
[1]
. Japan realised similar growthdue to a huge influx of foreign US investments after the Second World War.Anti-Globalist, dispute this fact stating that though globalisation andinternational trade gains has contributed to a significant growth in the worldeconomy, 80% of trade income is realised by 20% of the world economy. Themain trading partners of developed countries are within themselves
[2]
. The outcome of practising the Heckscher-Ohlin and Absolute Advantagereasoning trade theory
[3]
is that Developed countries produce and export highlytechnological and finance intensive goods, at which they have become moreeffective at exporting, whilst developing countries export labour intensiveproducts, such as agriculture and low-skilled goods at which they are moreefficient at producing. – (value added, marginal profit) The outcome is, trade gains from financial services, and technology intensiveexports vastly outweigh the gains from agriculture exports and labour intensivegoods. Hence Globalisation, in its drive to promote global competition has, in factkept developing countries poorer, and made Developed nations increasinglyricher and has kept a majority of global wealth circulating within only a handfulof countries. The actions of the WTO Talks and 2005 Hong Kong conference
[5]
, statisticallyhas resulted in little to solve this issue. WTO speak of open markets, yet setsstringent bureaucratic rules in place which serve themselves as trade barriersagainst developing economies, and with FDI mainly in the hands of developedcountries, developing countries hardly have access to enough funds to investfurther in their production, manufacturing and technological capabilities tocompete globally
[6]
. This global monopoly has resulted in a dangerous phenomenon, 51% of theworld’s FDI is in the hands of 10 countries
[4]
, increasing the global economy’ssensitivity to macro economical factors affecting only those handfuls of countries. The result of this trend in global dependence on a few countries is the increasedlikely-hood of a global recession. The 1997, Thailand's Currency Baht collapse amidst huge foreign debt
[7],
affecting most countries in Asia, many of whom struggled to stay afloat, andsignificantly increasing the region’s overall debt to GDP ratio, whilst almostbankrupting South Korea
[8]
.Growing protectionist trade policies in African and Asia grain and rice exportationis increasing the price of rice around the world
[9]
. Huge retreat in global oildemand is seeing oil prices fall lower than $50 a barrel
[10]
, actively impactingthe Middle East economy current and future economy prospects.Globalist argue though, that without globalisation, the demand for suchcommodities, i.e. oil and rice, and their generated income for the countriesexporting them would have been significantly smaller, there would also be hugeshortages in those commodities in parts of the world without the naturalresources to produce them, which was the main cause of past imperialistic wars.
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The effects of globalisation, GBE – 2008
 
 Yet the risks of over-dependency on other countries can be seen by the effects of the US recession. Trillions of Dollars have been wiped off the global economy, Stock markets slumsaround the world, the Euro zone and Japan are officially in recession, with manyother nations on the brink of it. Trillions in USD Needed in bailout funds, largeinstitutions and banks going into bankruptcy, or nationalisation resulting inthousands of job losses worldwide. Effects also include Singapore shippingindustries witnessing huge losses on half-empty shipments overseas
[11]
, andChina’s Toy Industry
[12]
.It can be said Globalisation caused the world to grow too quickly, resulting in risktaking based on forecasted gain, and the exploitation of market policies. Chinaand Japan floated their currencies against the USD; the result was a huge under-evaluation of their currencies, giving them un-even profits from trades with theUS, and in-essence exploiting producers and manufacturers overseas.Globalists argue globalisation was sparked by the world's understanding of theneed for unity after the effects of the two world wars. Sparking the creation of the Brenton Woods foundation, GATT, and other global unions such as WTO, UN,EU and SADC. This has increased economic inter-dependence, as a result,increased the tendencies to peaceful resolution of conflicts rather than violentmeasures, in the aim of continued economic gain and advancement.Anti-Globalists on the other hand have refuted this perception, statingglobalisation has paid the cost for countless wars and oppressive regimes sinceWW2. US financial inputs into the country of Somalia during 1970s and 80’ssustained the government of Siyaad Barre and his oppressive regime
[13]
,Western and European countries traded in weaponry with Saddam Husseinpreceding the gulf war, accounted for a large quantity of the weapon stockpileshe used against he’s neighbours, Kuwait and Iran
[14]
,Western countries still had huge investments in Zimbabwe indirectly funding theatrocities of the Mugabe regime, leading to the 2008 elections, notably the AngloAmerican £200m investment in the country
[15]
. Nevertheless globalisation hasincreased the effectiveness of sanctions against perceived bad governments, inthe way of trade and arms embargos and travel restrictions, in countries likeZimbabwe and Cuba.
Conclusion
As globalisation has resulted in increased world growth and opened global accessto information and technological advancement, I do not believe in movingagainst the globalisation trend. Instead FDI increase in developing countriesmust be encouraged allowing them to invest in available technologies tocompete more effectively. Stringent rules to stop MNC’s from dealing withoppressive governments and dictatorship regimes in the understanding thathuman rights, come before economic advancement. An international regulator“Watchdog” should be instigated, to enforce MNC’s business transparency, andstop political involvement in global markets, so MNC’s act with prudence and donot carry out such practices which led to the current global recession [
See bli1
]. Trade Blocs, must order periodic reassesion of member currencies so all currencyexchange and trade gains are even, reducing unfair trade gains.
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The effects of globalisation, GBE – 2008

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