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The Impact of Globalization in The Developing Countries

Globalization has brought both opportunities and challenges to developing countries. It has enabled technology transfer, access to developed country markets, and economic growth. However, it has also led to environmental degradation, financial instability, and increased inequality within and between nations. The components of globalization that impact developing countries are GDP, industrialization, and the Human Development Index, which measures education, health, and income. While globalization has increased business competition worldwide, it has also marginalized less skilled workers and increased the remuneration of capital over labor.

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52 views3 pages

The Impact of Globalization in The Developing Countries

Globalization has brought both opportunities and challenges to developing countries. It has enabled technology transfer, access to developed country markets, and economic growth. However, it has also led to environmental degradation, financial instability, and increased inequality within and between nations. The components of globalization that impact developing countries are GDP, industrialization, and the Human Development Index, which measures education, health, and income. While globalization has increased business competition worldwide, it has also marginalized less skilled workers and increased the remuneration of capital over labor.

Uploaded by

reyad bin
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Impact of Globalization in the Developing Countries

Introduction

Globalization is a process of global economic, political and cultural


integration. Globalization is playing an increasingly important role in the
developing countries. It can be seen that, globalization has certain advantages such
as economic processes, technological developments, political influences, health
systems, social and natural environment factors. It has a lot of benefit on our daily
life. Globalization has created a new opportunity for developing countries. Such as,
technology transfer holds out promise, greater opportunities to access developed
countries markets, growth and improved productivity and living standards.
However, it is not true that all effects of this phenomenon are positive. Because,
globalization has also brought up new challenges such as, environmental
deteriorations, instability in commercial and financial markets, increase inequity
across and within nations.

Components of Globalization

The components of globalization include GDP, industrialization and the Human


Development Index (HDI). The GDP is the market value of all finished goods and
services produced within a country's borders in a year and serves as a measure of a
country's overall economic output. Industrialization is a process which, driven by
technological innovation, effectuates social change and economic development by
transforming a country into a modernized industrial, or developed nation. The
Human Development Index comprises three components: a country's population's
life expectancy, knowledge and education measured by the adult literacy, and
income.2

The Economic Impact on Developed Nations


Globalization compels businesses to adapt to different strategies based on new
ideological trends that try to balance the rights and interests of both the individual
and the community as a whole. This change enables businesses to compete
worldwide and also signifies a dramatic change for business leaders, labor and
management by legitimately accepting the participation of workers and
government in developing and implementing company policies and strategies. Risk
reduction via diversification can be accomplished through company involvement
with international financial institutions and partnering with both local and
multinational businesses.

Globalization brings reorganization at the international, national and sub-national


levels. Specifically, it brings the reorganization of production, international trade
and the integration of financial markets. This affects capitalist economic and social
relations, via multilateralism and microeconomic phenomena, such as business
competitiveness, at the global level. The transformation of production systems
affects the class structure, the labor process, the application of technology and the
structure and organization of capital. Globalization is now seen as marginalizing
the less educated and low-skilled workers. Business expansion will no longer
automatically imply increased employment. Additionally, it can cause a high
remuneration of capital, due to its higher mobility compared to labor.

The phenomenon seems to be driven by three major forces: the globalization of all
product and financial markets, technology, and deregulation. Globalization of
product and financial markets refers to an increased economic integration in
specialization and economies of scale, which will result in greater trade in financial
services through both capital flows and cross-border entry activity. The technology
factor, specifically telecommunication and information availability, has facilitated
remote delivery and provided new access and distribution channels, while
revamping industrial structures for financial services by allowing entry of non-
bank entities, such as telecoms and utilities.

Deregulation pertains to the liberalization of capital account and financial services


in products, markets, and geographic locations. It integrates banks by offering a
broad array of services, allows entry of new providers, and increases multinational
presence in many markets and more cross-border activities.

In a global economy, power is the ability of a company to command both tangible


and intangible assets that create customer loyalty, regardless of location.
Independent of size or geographic location, a company can meet global standards
and tap into global networks, thrive and act as a world-class thinker, maker, and
trader, by using its greatest assets: its concepts, competence, and connections.

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