2. GLOBALIZATION (1) Lecture.pdf

Working Definition of 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 investmen...

Working Definition of 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, culture, political systems, economic development, and prosperity, and on human physical well-being in societies, around the world (Globalization 101, “ n.d.)  What is Globalization,from other Author’s? Globalization is defined as the increase in the flow of goods, services, capital, people, and ideas across international boundaries, - Harvard Business School Professor Forest Reinhardt. In other words, connecting with people takes less time than ever before, and moving from one space to another (e.g. around the world) is faster than ever before. 4  What is Anti-globalization? An act of opposing trade deals among countries facilitated and promoted by international organizations such as the World Trade Organization (WTO) in 1990s. A colloquial term for the stance of those who, internationally, coordinate, organize, and mobilize opposition to neoliberalism and the political power of transnational corporations. - Oxford Reference Example: the Global Justice Movement’; the ‘Movement of Movements Criticism of unjust international trade deals REASONS: 1.Economic Growth and Prosperity 2.Trade Expansion 3.Access to Resources 4.Technological Advancements 5.Cultural Exchange 6.Political Cooperation 7.Reduced Conflict 8.Human Development 4. Technological Advancements: Globalization encourages the flow of technology and innovation across borders. Countries can adopt and adapt foreign technologies to enhance their economic development and competitiveness. 5. Cultural Exchange: Globalization promotes cultural exchange, leading to a richer and more diverse cultural environment. 6. Political Cooperation: Globalization can encourage countries to work together on shared challenges such as climate change, terrorism, and public health. International organizations and treaties are often formed to address global issues that no single country can tackle alone. 7. Reduced Conflict: Some argue that economic interdependence through globalization can reduce the likelihood of armed conflict between countries, as it is often not in the best interest of nations with close economic ties to engage in hostilities. 8. Human Development: Globalization can improve human development indicators such as access to education, healthcare, and information. Problems … 1. Income Inequality 2. Exploitation of Labor 3. Environmental Degradation 4. Cultural Homogenization 5. Loss of Sovereignty 6. Financial Instability 7. Health Risks 8. National Security Concerns 9. Dependency on Global Supply Chains 10.Crisis Spillover 1.Income Inequality: Globalization can exacerbate income inequality both within and between countries. While some individuals and businesses benefit from access to global markets, others, particularly those in low-skilled or declining industries, may face job displacement and wage stagnation. 1.Exploitation of Labor: In pursuit of lower production costs, some multinational corporations may engage in labor practices that exploit workers in developing countries. This can include low wages, poor working conditions, and violations of labor rights. 1.Environmental Degradation: The pursuit of economic growth and increased production can put a strain on natural resources and contribute to environmental degradation. 4. Cultural Homogenization: The spread of global media, multinational corporations, and consumer culture can lead to the erosion of local cultures and traditions. 5. Loss of Sovereignty: As countries become more economically interdependent, they may cede some degree of sovereignty to international organizations and agreements. 6. Financial Instability: Globalization can contribute to financial crises, as the interconnectedness of financial markets can transmit economic shocks across borders. The 2008 global financial crisis is a notable example of this phenomenon. 7. Health Risks: The rapid movement of people and goods across borders can facilitate the spread of diseases, as demonstrated by the COVID-19 pandemic. Globalization can also lead to the global diffusion of unhealthy diets and lifestyles. 8. National Security Concerns: Greater interconnectedness can pose national security challenges, as countries become more vulnerable to cyberattacks, terrorism, and the illicit movement of goods and people. 9. Dependency on Global Supply Chains: Countries that rely heavily on global supply chains for essential goods and services may be vulnerable to disruptions, as seen during the COVID-19 pandemic when supply chains were disrupted, leading to shortages of critical medical supplies and other goods. 10. Crisis Spillover: Economic or political crises in one part of the world can quickly spread to other regions through global financial markets and trade networks, amplifying the impact of these crises. ADVANTAGES OF GLOBALIZATION 1. Economic Growth A. Access to labor B. Access to jobs C. Access to resources D. The ability for nations to “specialize” 2. Increased Global Cooperation - increased globalization has been linked to a reduction— though not an elimination—of conflict. 3. Increased Cross-Border Investment - Foreign investment also often comes with, or in the form of, technology, know-how, or access to distribution channels ADVANTAGES OF GLOBALIZATION 1. Increase of literacy 2. After the Philippines joined the WTO, World Trade Organization, there has been several opportunities for other countries to trade and create work for those in our country. 3. Consequently, the full-year 2022 personal remittances also reached an all-time high of US$36.14 billion. This level was 3.6 percent higher than the US$34.88 billion remittance flows in 2021. 4. The flows of foreign direct investment, it has accelerated technology transfer, improved productivity, and provided employment opportunities. DISADVANTAGES OF GLOBALIZATION 1. Increased Competition - The pool has simply widened. Protectionism often takes the form of tariffs, quotas, or non-tariff barriers, such as quality or sanitation requirements that make it more difficult for a competing nation or business to justify doing business in the country. 2. Disproportionate Growth - Globalization can introduce disproportionate growth both between and within nations. 3. Environmental Concerns – Increased globalization has been linked to various environmental challenges, many of which are serious, including: Deforestation and loss of biodiversity caused by economic specialization and infrastructure development Greenhouse gas emissions and other forms of pollution caused by increased transportation of goods The introduction of potentially invasive species into new environments Businesses have made environmental concerns and sustainability a priority: embracing the tenets of the triple bottom line and the idea of corporate social responsibility. CONCERNS OF GLOBALIZATION 1. The market for oil is exceptionally tight. 2. The risks stemming from financial globalization - Both mortgage borrowers and investors in these markets appear to have been so confident that housing prices would continue rising that they ignored the consequences of a downturn and the attendant credit risks. 3. Potential instability from capital inflows - Emerging economies can best respond to such capital flows with a twofold response: sound macroeconomic management and financial sector deepening 4. The backlash against globalization in countries in many different positions Sources: https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp073107  PROS AND CONS OF GLOBALIZATION Pros Cons A larger market for goods and services Concentrates wealth in richer countries Cheaper consumer prices Some poorer countries can be left behind Outsourcing can benefit both domestic Poorer countries can be exploited of their labor firms and foreign labor and physical & intellectual resources Increased standard of living Cultures and the products consumed around the world can become homogenized