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Thursday, 13 September 2018

Effects of Globalization

As seen above,the effect of globalization are both positive and negative on the world economies at different degrees. The notable ones are as follows;

Positive Effects:
(1) Globalization has improved the standard of living of less developed countries who now have access to variety of goods and services which they lack technical know how to produce.

(2) There is eradication of poverty through opportunities created for both skilled and unskilled work force as they serve the newly developed and emerging market of the world.

(3) Globalization has lead to reluctance of countries going to war among themselves as a result of economic interests or reasons. The information and promotion of various regional economic groups give credence to this assertion. It will be difficult to see members of the European Union going to war among themselves or member or ECOWAS preferring war to peace.
(4) It has the potentials to improve global unity by creating solidarity among the various people of the world. The communication channel created by the internet has provided networking capacities among  various groupings including the Human Right Organisations.

It permits an increase in the level of global out put through the instrumentality of trade. The economies of scales achieved in the production and marketing of standardized products by global companies  have the basics for increased productivity.

(5) It makes possible the availability of foreign made products in developing countries at cheaper rates.

(6) It enhances the distribution of income globally ,international marketers who participate in the global channel of distribution in order to complete the exchange relationship do so at profit.

(7) The increasing global flow of goods, ideals,people, news,money technology etc has succeeded in creating a new global neighbourhood. In the process ,the integration and propagation of local culture and language are achieved.

Negative Effects:
(1) Globalization has widened the gap between the rich and poor  people of the world. In 2005,the economist reported that the emerging economies of the world produce more than half of the total global output. Since the poor nation of the world cannot compete favourably they are at the receiving end of the continuum.

(2) It has encouraged environmental degradation especially in the developing countries where some of the products from a combination if developed and emerging economies are dumped.

(3) The spread of various diseases such as HIV/AIDS, yellow fever,hepatitis are being promoted by these forces of globalization. These could occur through contaminated products and already infected expatriates. In September 2008 tens if thousands of children fed on Chinese tainted milk fell sick while others died. This was noticed in most parts of the world where the products was exported to. Authorities in China blamed fairly suppliers for the crisis. This negative effect;a greedy approach could only be perpetuated in order to meet globally induced production output.

(4) Globalisation has increased the rate of unemployment in developed countries. This stems from the fact that foreign products more often than not out play the locally manufactured products in terms of quality,low prices and availability. The Nigerian experience in the tyre and textile industries is very worrisome. Th  decision of Michelin to stop manufacturing activities in Nigeria and the reduction in productive activities of Dunlop is said to have resulted in the loss of jobs for an estimated 5,000 Nigeria (both direct and indirect employees of the two companies). Interestingly, both companies in their separate statements issued by management of the firms assured their esteemed customer in the country of their decision to opt for the importation of their various brands,saying it is a cheaper business mode than to manufacture in Nigeria.

(5) Sudden out break of political and economic upheavals in developing countries could cause international investors to withdraw without notice from the trouble countries. Such massive sudden and unexpected withdrawals could devastate the economy of the countries involved.

A notable exams here is Zimbabwe ,an agricultural based economy which forced white farmers out of the country. Today the disruption have caused official inflation to reach 231m percent while independent analysis put it to be closer to 300m percent. In Zimbabwe millions of their dollar is required to buy a loaf of bread.

(6) It has also to some extent favoured the growth of rich multinational companies (MNCS) that have practically taken over the world market for certain products. As at 1998,just ten companies controlled 86percent of the US $262 billion telecommunication business (Inyanga 2004:715).

(7) With the unmindful cross fertilization of cultures, there at clashes of different social cultural forces with the enhancement of materialistic values in most countries of the world. The Integrated Communication Technology(ICT) as evidence in the internet has been used negatively to promote crime,pornography,racism,gambling and other social vises. Money laundering as well as other financial crimes have bean promoted through this means.

(8) The primary motive of every global firm is profit maximization. More so,an unregulated global economy dominated by hungry firms can only sustain a lopsided economy where humanity is impoverished without regard.

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