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Benefits of Globalization

Pushpa Duddukuri Oct 6, 2018
We don't think twice while using terms like liberalization, free trade, globalization, etc. quite liberally to picture a world with fewer restrictions and boundaries. Is globalization really an answer to the world economy problems? Read on to find out.
A long, long time ago, our beloved planet was considered to be flat. Well, there were many beliefs and theories of people of those times which would now sound like delusions of a schizophrenic mind.
However, as the time has flown through many centuries and years, we are once again standing at a crucial turn of road, which is tugging us to believe that our small yet cozy world is in fact flat (i.e figuratively a level playing field).
Yes, globalization has diminished the value of borders, as the world has metamorphosed into a global village and a village can reach to any part of the world at any time. What exactly is this globalization phenomenon which all raving about. Well, its benefits can be reaped only when the true and significant meaning of globalization is understood completely.

The Global Village: A Reality

Globalization is an all round process of international trade between countries, tapping of newer and cheaper markets, coupled with less restricted human interaction and information technology.
You see, there are 196 countries or so in the world, each having its own laws and rules to conduct trade, facilitate transportation of goods, protect the interests of their citizens, to manage technology and most importantly, govern the inflow and outflow of capital. All these rules and regulations worked out fine when, let's say, things were uncomplicated.
But now, it can be mighty difficult if a country continues to bear a stubborn stand by banning exports/imports of goods, increasing its currency exchange rate, making unfavorable laws for trade, etc.
It is now accepted by many that the costs and profits of globalization are enormous, and hence it should not be prerogative of the western world or imposed on the developing countries. Each and every country has to create a balance so that they can protect their interests and be a member of the world trade and business community too.

Economic Benefits

Resisting to the advantages of globalization is like competing in a sports car race with a bullock cart. However, there are many countries which refuse to take part in this race at any cost. They believe that their home-made products and indigenous goods would take a hit if they open their markets to the richer countries.
Dumping of goods (as done by done by some countries) has proved to be a negative effect of globalization and shown that the skeptics were not that wrong. Since the social and economic benefits are too huge to be brushed off under the carpet, here are some pointers which reveal the extent of ripple effect of free trade and global competition.

Globalization for Developing Countries in Asia

► Backed by sound economic policies and information technological advancements, the South-East Asian countries have prospered as their employment growth rate has increased tremendously. One fine example of this phenomenon is India which continues to have an economic growth rate of 8 percent or more per year.
► Easy access to foreign capital and increased foreign direct investment lays down the foundation for a competitive and yet, thriving market.

► Since the players increase in the market, the consumers not only get better products, but also at a cheaper price. Hence, another benefit is low inflation rate which helps the country to have a stabilized economy.
► Poverty has reduced in the Asian countries which have adopted liberalized economic policies.

► Companies from other countries bring their products with their technologies. Newer technologies in IT, production and research cut down the production cost, and increase sales. Moreover, they also sharpen the skills of the local labor force.

Globalization in Africa

► Africa is a huge continent with many countries which are downtrodden and poor mostly sustaining life on agriculture and aquaculture. Not only that, there are regions which are torn apart by war and violence, and hence steady income from a stable employment would work as a respite from the in-fighting.
► Education plays a major role in the development of any nation and is one of the important drawbacks in the growth of the African region. UNESCO believed that 48% of children in Africa were never ever enrolled in primary schools in the year 2000.
This disappointing number can go down if African countries open their doors to free market policies. With significant players in the market, a major positive impact would be on the education and technological field of the African continent.
► More resources and FDI would be at hand because of globalization and ensure lower exchange rate of local currency. Hence, it will indirectly help boom the economy.
► Though, globalization is not a magic wand and cannot wipe away all of Africa's woes, but it can surely create a favorable environment for a fair and stable government. Globalization would bring any African country more closer to rest of the world and any wrongdoing on the part of a government or a faction can be monitored and curtailed.
► Trade treaties and co-dependence in business is fostered by globalization. It can bring about a vast change in the political, economical, and social set ups in Africa.
► With more money, resources and people coming to Africa, the real and the most devastating problems of these countries could grab the limelight, and relief intervention can be provided by the global community.

Globalization in America and Europe

► Outsourcing is both one of the pros and cons of globalization. On one hand, it gives opportunity to the corporates to mete out work to its offshore branches or partners and thus, get the work done at a lesser cost. And on other hand, it raises serious concern among local people for the lack of job opportunities in their own native land.
► Utilization of capital with cropping up of new markets and opportunities is the impact of globalization on the richer countries. This in turn would generate more wealth and prosperity.

► Issues related to ethnic conflicts and diversity could be resolved as a result of inter-continental travel and immigration. Thus, opens the avenue of the cultural benefits.
► The MNCs are the real winners in the process of going global. They not only get new consumers, more profits, more assets and employees, but also carve out a global image for themselves. Soft drinks giants like Pepsi or Coca Cola are ideal in regard, as they have reached so far of places from the scorching deserts of Africa to the remote villages of Asia.

Successful Examples of Globalization

Globalization also means the connection between production, technologies, market and logistics. In short, it accelerates the communication between people in different countries, companies and the governments. It has both good and bad side.
Though it can lead to the loss of cultural identity to some extent and can gradually destroy the local market players, it can also uplift the standard of living in an area. MacDonald outlets in the streets of Asia, the popularity of Japanese cartoons or 'Anime' in the USA and hip-hop craze in Arab countries are all examples globalization at its best.
Over the years, countries like China have benefited from making themselves a part of the global economy. China is being touted as the best example of globalization being the fastest growing economy in the world with a growth rate of 9.8% or more in the last few years. Today, globalization is inevitable; best to embrace it and use it for one's own advantage.
Globalization is a process which could change the world gradually. However, globalization is just not limited to free trade and market policies, its repercussions can be felt on cultural level too.
Culture and globalization are two forces which could shape the global identities of individuals. Although, all these advantages of globalization sound more theoretical than pragmatic, it is up to our nations and us to make it a reality.