EFFECTS OF GLOBALIZATION

GLOBALIZATION

​Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

There are three types of globalization namely:

1. Economic:
   Countries that trade with many others and have few trade barriers are economically globalized.
2. Social:
   A measure of how easily information and ideas pass between people in their own country and between different countries (includes access to internet and social media networks).
   
3. Political:
   The amount of political co-operation there is between countries.

POSITIVE AND NEGATIVE EFFECTS OF GLOBALIZATION

POSITIVE EFFECTS OF GLOBALIZATION

FREE TRADE

• Exchange goods and resources

• Increased Exports and import

FREE MOVEMENT OF LABOR

• advantages to both workers and recipient countries. Example. If country experiences high unemployment, there are increased opportunities to look for work elsewhere. This process of labour migration also helps reduce geographical inequality

INCREASE IN COMPETITION

• Domestic monopolies will  try to develop the quality of their products and services

• Increased competition in domestic industry Increased Employment-create new jobs

INCREASE IN INVESTIMENTS

• Investment by multinational companies can play a big role in improving the economies of developing countries.

• Capital Inflow: creation of firms, leads to increase income levels consumer demand

BENEFITS FROM CHANGING TAX SYSTEMS

​The desire of businesses to benefit from lower unit labor costs and other favorable production factors abroad has encouraged countries to adjust their tax systems to attract foreign direct investment (FDI). Many countries have become engaged in tax competition between each other in a bid to win lucrative foreign investment projects

DECREASE IN PROTECTIONISM

Old forms of non-tariff protection such as import licensing and foreign exchange controls have gradually been dismantled. Borders have opened and average import tariff levels have fallen. That said, it is worth knowing that, in the last few years, there has been a rise in non-tariff barriers such as import quotas as countries have struggled to achieve real economic growth and as a response to persistent trade and current account deficits

GROWTH OF MULTINATIONAL COMPANIES

In their pursuit of revenue and profit growth, increasingly global businesses and brands have invested significantly in expanding internationally. This is particularly the case for businesses owning brands that have proved they have the potential to be successfully globally, particularly in faster-growing economies fueled by growing numbers of middle class consumers.

POSITIVELY IMPACT EDUCATION

• Change of education strategies
• Use of technology in education
• Increase of international schools

Spread of technology

raise worker s skills

Environmental issues

Using non-renewable resources

Economies of scale

Many economists believe that there has been an increase in the minimum efficient scale (MES) associated with some industries. If the MES is rising, a domestic market may be regarded as too small to satisfy the selling needs of these industries. Many emerging countries have their own transnational corporations

Spread of Culture

Happens when the cultural beliefs and social activities are spread through different ethnicities, religions.

NEGATIVE EFFECTS OF GLOBALIZATION

Free Trade Can Harm Developing Economy

• Developing countries are hard to compete with developed countries
• Developing countries are often harmed by tariff protection
• Poor countries suffering disadvantage (export - import)

CONCERNS IN ENVIRONMENTAL ISSUES

• Environmental degradation such as:
• Deforestation
• Pollution
• Global Warming

CULTURAL EROSION AND DIFFUSION

When the local cultures are lost, the world culture will replace.

NEGATIVELY IMPACT EDUCATION

Local schools cannot compete

LOSS OF JOBS

Rich nations outsource their manufacturing and white-collar jobs to developing economies

INCREASE IN CRIME

It has led to an increase in activities such as: child labour and hard working conditions

Consumerism

Consumerism habits has increase junk food, branded products.