Log 5: Globalization – The Effects

NOTE: Before you begin reading take a note that this was not done by me. It was done by a dear friend of mine from Uzbekistan. I'm just sharing because I think it's a great work.

OLD LOG:
Posted on WEDNESDAY, APRIL 2, 2008 at 8:36 PM 

Posted by ZIY Lama 

Done by Anuar Nurakhmet

Nowadays, more people criticize globalization. They demonstrate against summits devoted to World Trade Organization. Others believed that globalization will help to develop national economics.

Firstly, I want to talk about economical globalization. It consists of trade, direct foreign investment, multinational company’s performance, financial floods between countries and international migration and innovations. Financial floods and migration are positive for global economy as well as for national economy. Financial floods means that multinational companies invest billions of dollars in countries with developing economy. Direct investments help to develop national economy, to open new work places, to raise living standards. For example, according to The Economist there are about US$6 billion direct investments that come each month to China’s economy. As a result, by 2020 China is going to be the third developed economy after USA and European Union.

Next, globalization often causes a mass migration that has several benefits. Some countries have plenty of labor force while other countries economy meets with shortage of human recourses. Controlled migration solves this problem. Given example, US has increased living standards for citizens, as a result, less people want to work in agricultural, service sectors. I mean, so it brings to their pride to not take on the lower level occupations. Immigrants from Southern America countries and Mexico can replace them and earn money for their own family. It is mutually beneficial.

It is true that in Laos and Vietnam the workers get notably lower wages than their colleagues in developed countries. In developing countries multinational companies (MNC) pay little wage and do not improve working conditions for locals. However, MNC’s workers usually get 20-30% higher wages than their co-workers who are working for local factories.

On other hand, anti-globalists say that multinational companies’ performances in developing countries worsen their ecology. They broke countries ecological legislation and spoil water, air and soil. Sometimes MNCs even push governments to accept beneficial decisions for them. For instance, two years ago Hyundai Motor Corporation was accused that they had used the bribery in purpose to win tender to supply governmental agencies with their vehicles. As a result, Hyundai Motor Corporation asked an excuse and send $1 billion for charity purposes.

Moreover, globalization is interdependence between countries. It causes dependence in politics, culture, and economy. The shrinking example is world economic crisis in 1929 which was all over the world. The problem in economy of several countries can cause crisis in many countries.

Totally, if we calculate all minus and pluses, I think that globalization brings more benefits than harm. The experience that has been generated during the last century proves that open economy can develop faster than clothed. Economic growth and development are that thing that every people in every country desire.

By Anuar Nurakhmet