Globalization's economic benefits for developing nations

Globalization: Making Society Better

One of the most divisive and polarizing issues today is the judgments people are making with regard to globalization. From being demonized to lauded as the most critical economic engine underprivileged nations have to rely on, globalization's influence is often clouded by inaccurate and often biased reporting and slanted by the political agendas of nations affected by its dynamics. Paradoxically the nations that have resisted globalization including many in Latin America are suffering economically more than ever before mainly due to its political instability and anti-globalization stance. Conversely China and the Pacific Rim nations have taken a decidedly pro-globalization stance and as a result are reaping both democratic and economic gains, leading to gains in education, health care and ultimately the abilities of their countries to compete globally more effectively. The intent of this paper is to argue the benefits of globalization and how nations' economies are further strengthened by participating and competing as a result.

Defining Globalization

Evidence of just how polarized the views of globalization are is evidenced in the many definitions of what it is. Globalization has been defined by a multitude of examples and constructs, each slanted to the specific philosophical leanings of the authors. One of the most neutral definitions of globalization has been defined (World) as "the growing integration of economies and societies around the world." Anti-globalization activists point to drastically underpaid workers, misappropriation of revenues, cultures being desolated and westernized at the expense of their innate richness, and the long-term depleting of 3rd world nations'; human and natural resources for the sake of multinational corporations' gains in profits. In fact globalization is responsible for healthcare, education, food distribution and retailing at competitive prices, and the development of entire nations' infrastructures through the use of foreign direct investment (FDI) in conjunction with joint ventures and other forms of risk and gain sharing. The telecommunications infrastructure of India for example (Chakraborty & Basu 135-142). The influence of FDI on the Indian communications infrastructure has also lead to the development of entirely new forms of order management systems across industries, increasing the velocity of transactions between India and trader nations in the process (Chakraborty & Basu 141). The many instances of how globalization has been responsible for more efficient and timely food distribution throughout India is another case in point (Attwood, 2067).

In the context of the 21st century globalization has been written by Thomas Friedman, author of several best-selling books on the topic of globalization has defined the concept as follows:

The inexorable integration of markets, nation-states, and technologies to a degree never witnessed before-in a way that is enabling individuals, corporations and nation-states to reach around the world farther, faster, deeper and cheaper than ever before.... The spread of free-market capitalism to virtually every country in the world " (T.L. Friedman, p. 7-8).

In evaluating the contributions of globalization to the growth of economies, the theories of Dr. Michael Porter are also insightful to use as theoretical constructs. Specifically Porter's Determinant of Competitive Advantage as defined in his books and articles (Porter, 12-27) reflect an extension to the Ricardian-based theories of global trade competitiveness emanating from productivity of specific industries within nations, stating that productivity is the clearest measure of national competitiveness. (Heckscher and Ohlin. 125-135, 150) have stated in much of their analysis that the basis of specialization and hence trade advantages are the results of differences in factor endowments, and that the rate of change across factor endowments within nations has a significant effect on their progress towards economic growth. Their analysis supports the hypothesis that factor endowments are actually generated through the interaction between and within trading partner organizations that comprise a given nations' economic and socio-cultural fabric. In other words, a nations' ecosystem is made more effective, valuable, and able to concentrate on its core strengths and refine them than if they operated purely in isolation. Accordingly the role of globalization is seen as the catalyst for allowing the innate strengths of a given nation to come to fruition more efficiently and with greater competitive strength than if they had been protected or otherwise subsidized by well0-meaning yet ill-informed governments (Milner and Kubota, 107-124). In short, the competition that globalization fosters actually brings out the innate strengths of nations and their economies, further increasing their ability to become self-sustaining and increase the quality of life for its citizens (Sirgy, Lee, Miller, Littlefield, Atay, 220-224). It is not, as the anti-globalization activists' claims, due to the paternalistic and accused graft- and corruption-based approaches to managing global expansion in 3rd world nations (Bhagwati, 10-12) or in the use of funding to forward socially based agendas for economic gain, a favorite criticism of anti-globalization activists (Bhagwati2, 439-463). Instead it is in providing the necessary economic spark to get an entire nations' economic engine moving forward rapidly and becoming a global competitor. Globalization fosters all forms of financial independence, leading to democracy and greater levels of personal, ideological and religious freedoms for a nation's citizens. The lack of democracy in Latin America contrasted with the increasing freedoms in China, albeit in small steps, prove this dynamic out clearly. Fostering greater economic growth and getting nations to find their core competitive catalyst are the foundation of freedoms that other nations, not so fortunate to find these innate strengths, continually struggle to find and as a result find it more difficult to compete on a global scale (Sapsford and Garikipati, 1571-1579). The conclusion then is that as global economies become even more competitive than ever before, there is the urgent, critical need for nations of all economic strata, specifically 3rd world nations, to find that core competitive catalyst and capitalize on it (Milner and Kubota, 113-123).

Summary

Globalization is essential for any nation to find its competitive catalyst for growth, and fuel a higher level of economic and social freedoms for its citizens. While detractors to globalization argue for isolationism, this strategy just weakens industries and nations faster than a drop-off in educational spending or infrastructure. To become protectionist is to rob citizens of their freedoms at the most basic level, for without a nation relying on and strengthening its catalyst of competitive growth, it begins to atrophy and die. The confusion and leanings toward socialism and communism in Latin America are a testament to this dynamic where the free market economies of the Pacific Rim show the converse. Even China, the last bastion of communism, has become the world's manufacturing center, and as a result, their GNP and GDP are consistently outpacing every nation in the world in terms of growth quarter-to-quarter. The result has been newfound freedoms of speech, freedom of travel and incredibly, freedom of dissent, even to small extent. Globalization is the fule that nations need to find what their true competitive strengths are. Coddling nations through protectionism and subsidies is like taking protein or iron from their diets; over time, they will atrophy and die due to a lack of infusion of capital, competitive vibrancy and growth. In short, globalization's effects on nations is to make them capable enough to seize freedoms that myopic and ill-advised anti-globalization activists would seek to rob from them through protectionism and ignorance that any given nations' ability to grow is based on its ability to globally compete.