When speaking of globalization we refer to the phenomenon we’re living in today, to a society, which works together on a social, cultural, economic and political basis.
Globalization became popular after the industrial revolution, in the early 1990’s, its concepts basically refer to a strategic economic planning, which promotes integration, growth and boosts free trade. Promoting free trade might have been the most important issue this process had to deal with, as by eliminating all the barriers between countries, we finally were given the opportunity to build up a flow of goods and services, which was unhindered by government-imposed restrictions.
The drop of these barriers were very cost effective on one hand but also promoted great INTERDEPENDENCE between different countries. Nowadays, the world’s economy wouldn’t survive without free trade.
With globalization constantly growing technology became more and more important in order to reduce costs (as we saw in the example of free trade), be more effective and be able to push the phenomenon to the point we’ve reached today – Globalization controlling the world.
But was Globalization profitable to the whole world? Did it promote solely well? Who benefited from it? Who didn’t?
When we refer to economic theories of comparative advantage, we can clearly see that free trade suggests that all the countries involved in the trade are somehow benefiting. This is due to the fact as in general it leads to lower prices, lower unemployment rates, higher standards of living and higher outputs.
This obviously is true to a certain point, but still the difference lays on how much they profit and the gap, which grows between the winners and the losers.
If we have a look at the graph shown below, we can clearly see that the US has a main impact on the International Trade. But if we had the same graph showing us the importance Africa has on the International Trade Exposure, we would barely see the line climbing above null.
As such we can tell that the winners of Globalization clearly are the US, Europe and the BRIC’s, which somehow made their way through and outsourced the whole process to a maximum and have nowadays a very important place in the international economy.
In contradiction to that Africa and South America are the losers of the whole process, as when globalization started to overcome the world at once, those countries weren’t developed enough to compete with the others and were always trying to keep up with them. Still, this didn’t work out as while the others kept on growing more year by year, getting more and more interdependent, they were left besides and haven’t had the possibility to interact.
If we take an example of trade between developed and developing countries: poorer countries mainly export agricultural goods and it is very hard for them to compete with stronger countries which are more likely to subsidize their own farmers as they are willing to save their national markets.
However this leads us to the fact that as the poorer farmers cannot compete, they have no other way than to sell their crops at extremely low price, which are far inferior than what the market is paying.
Anyhow the main issue nowadays basically is this incredible gap, which build itself up during the last decade. If globalization is keeping up steadily growing that way neither Africa nor South America are very likely to reach the level of the benefiting countries any time soon.
Globalization became popular after the industrial revolution, in the early 1990’s, its concepts basically refer to a strategic economic planning, which promotes integration, growth and boosts free trade. Promoting free trade might have been the most important issue this process had to deal with, as by eliminating all the barriers between countries, we finally were given the opportunity to build up a flow of goods and services, which was unhindered by government-imposed restrictions.
The drop of these barriers were very cost effective on one hand but also promoted great INTERDEPENDENCE between different countries. Nowadays, the world’s economy wouldn’t survive without free trade.
With globalization constantly growing technology became more and more important in order to reduce costs (as we saw in the example of free trade), be more effective and be able to push the phenomenon to the point we’ve reached today – Globalization controlling the world.
But was Globalization profitable to the whole world? Did it promote solely well? Who benefited from it? Who didn’t?
When we refer to economic theories of comparative advantage, we can clearly see that free trade suggests that all the countries involved in the trade are somehow benefiting. This is due to the fact as in general it leads to lower prices, lower unemployment rates, higher standards of living and higher outputs.
This obviously is true to a certain point, but still the difference lays on how much they profit and the gap, which grows between the winners and the losers.
If we have a look at the graph shown below, we can clearly see that the US has a main impact on the International Trade. But if we had the same graph showing us the importance Africa has on the International Trade Exposure, we would barely see the line climbing above null.
As such we can tell that the winners of Globalization clearly are the US, Europe and the BRIC’s, which somehow made their way through and outsourced the whole process to a maximum and have nowadays a very important place in the international economy.
In contradiction to that Africa and South America are the losers of the whole process, as when globalization started to overcome the world at once, those countries weren’t developed enough to compete with the others and were always trying to keep up with them. Still, this didn’t work out as while the others kept on growing more year by year, getting more and more interdependent, they were left besides and haven’t had the possibility to interact.
If we take an example of trade between developed and developing countries: poorer countries mainly export agricultural goods and it is very hard for them to compete with stronger countries which are more likely to subsidize their own farmers as they are willing to save their national markets.
However this leads us to the fact that as the poorer farmers cannot compete, they have no other way than to sell their crops at extremely low price, which are far inferior than what the market is paying.
Anyhow the main issue nowadays basically is this incredible gap, which build itself up during the last decade. If globalization is keeping up steadily growing that way neither Africa nor South America are very likely to reach the level of the benefiting countries any time soon.
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