Globalization's effects on developing countries

Globalization and Developing Countries

As defined by the World Bank in its handbook on the subject, globalization is defined as "the growing integration of economies and societies around the world." It has been one of the most hotly-debated topics in international economics over the past few years, given that globalization, through creating a more united global economy, has generated "rapid growth and poverty reduction in China, India, and other countries that were poor years ago." These declines in poverty have been generated by such globalizing forces through the outsourcing of jobs and the extension of American factories to these nations. "But globalization has also generated significant international opposition over concerns that it has increased inequality and environmental degradation." In the short-term, poverty reduction may have been achieved, but at the expense of these nations' environments and the destruction of locally generated forms of commerce.

Overall, globalization has thus proved to be a negative rather than a positive force in the developing world.

True, in his political treatise on the benefits of globalization, The Lexus and the Olive Tree, Thomas Friedman wrote of globalization is "it not just some passing trend. Today it is an overarching international system shaping the domestic politics and foreign relations of virtually every country, and we need to understand it as such...can be incredibly empowering and incredibly coercive. It can democratize opportunity and democratize panic. It makes the whales bigger and the minnows stronger. It leaves you behind faster and faster, and it catches up to you faster and faster. While it is homogenizing cultures, it is also enabling people to share their unique individuality farther and wider."

But while a consumer in India may gain a job from an American company as a telemarketer, for example, the destruction to India through industrialization to compete in a global marketplace will result in long-term environmental and economic degradation, rather than a job that will merely feed one man or woman's family for his or her lifetime, or less than that -- what of his or her son or daughter's environment, in terms of health, and that child's ability to begin his or her own business, from India itself?

One reason for Friedman's positive gloss upon globalization is his overwhelming focus on the immediate, positive political benefits of globalization. He stresses that globalization promotes democracy through trade and by opening up formerly closed governments to the larger world. However, if individuals do not have enough to eat, and are used as exploited labor to produce cheap goods for the American First World populace, these benefits can hardly be reaped.

As observed by no less a personage than Joseph E. Stiglitz, 2001 winner of the Nobel Prize for Economics "there needs to be a better balance between the role of markets and the role of government. Simplistic reforms based on free-market ideology don't work. The way that East Asia managed globalization, which combined an export-orientation with policies aimed at poverty reduction, worked even for the poor people. These countries did liberalize trade, but only as they created jobs," jobs that were permanently rooted in the local infrastructure of the nation, rather than dependent upon other nation's conglomerates.

The political benefits gleaned by Friedman will also have little benefit, even for the United States, moreover, if economic benefits are not similarly reaped -- after all, the terrorists that attacked the World Trade Center, filled with hatred of America's power, wielded IBM laptops in their service of Islamic power, in defiance of Western values. Moreover, neoliberal economic globalization encourages the pursuit of profit regardless of social and environmental costs. Such globalization "is associated with increasing levels of inequality, both between and within countries; the concentration of resources and power in fewer and fewer hands," ultimately resulting in an erosion of democracy on a world wide level.