The Meaning of Globalization, Its Types and Effects on the World Countries - Term Paper Example

?The past 20 years have been full of talks and debates about globalization. Globalization may be defined as a process of countries’ economies, politics and cultures becoming more interrelated and interdependent. Since it is a rather broad definition, it is definitely worth to take a closer look at the concept of globalization. So, the goal of this paper is to define the meaning of globalization, of its types and effects on the world countries. The paper will also present an attempt to determine whether globalization can be a positive phenomenon for the whole world or for certain countries only. It might seem that globalization is a relatively new phenomenon for the world society. However, as scientists suggest, one of the fist waves of modern globalization were observed between 1850 and 1914, around the Industrial Revolution (Naghshpour), when transportation and communication channels between countries were improved (O’Rourke and Williamson 30). At that time globalization, in form of ‘free trade’, was imposed by such countries as the USA, Germany and Great Britain with the help of “gunboat diplomacy or through colonial control” (Jovanovic 258). Probably for that reason Khor (15) defined globalization as “what we in the Third World have for several centuries called colonization”. The second great wave of globalization, as Jovanovic (258) writes, came with the introduction of mass container and air transport, as well as cheap and reliable telephone and Internet connections. With these technological innovations the people of the world became closer to each other, as well as got opportunities to fragment production and mobilize trade and capital. The definition of globalization has also changed with time. Larsson, for instance, suggests that globalization makes the world shirk; distances are becoming shorter, while mutually beneficial interaction – easier (Larsson 9). So, globalization is now viewed as the process of world countries’ becoming closer in their financial, cultural, social and political interactions. Another view on globalization is presented by Nikitin and Elliott. They define this process as “an establishment of the global market free from sociopolitical control” (Nikitin and Elliott 14). This leads to an assumption that globalization entails economic integration, exchange of knowledge, as well as interdependence of political and legislative decisions of world countries. Among the latest definitions of globalization is that of Al-Rodhan, who concludes that “globalization is a process that encompasses the causes, course, and consequences of transnational and transcultural integration of human and non-human activities” (Al-Rodhan 5). Therefore, it can be said that globalization is the process which makes integration and communication between countries, nations, businesses and individuals easier and less dependent on political or territorial constraints. This means that state boundaries or long distances play a less important role in communication and cooperation of nations. As countries become more integrated, they become more interconnected and interdependent in many aspects of their operations. Technological developments in transportation and communication have made it possible for world countries and people to become closer. The Internet, in its turn, has sped up and intensified the process. Availability and relative cheapness of Internet access around the world has diluted the states’ boundaries having allowed more people and businesses to work internationally. This has made different types of globalizations become more distinct and powerful. Among the major types of globalization are economic (financial), socio-cultural, and political (Dreher, Gaston, and Martens 2). Economic and financial types of globalization are among the most discussed ones because they are related to interdependence of world economies, increased flows of international capital and cross-border trade of goods and services (Shangquan 1). Technological advancements in transportation and communication made economic globalization possible and lead to “rising global linkages through cross-border financial flows” (Prasad et al 7). Free trade is the most noticeable achievement of economic and financial globalization. However, free trade, while traditionally viewed as a positive thing, has its disadvantages. A good example to illustrate the impact of economic and financial globalization is China. Foreign trade and foreign investments greatly contributed to the growth of Chinese economy. Since the introduction of free trade policies in 1978, the total value of exports and imports has been steadily increasing at around 30-35% yearly (Chow 1). Intensified production and trade has led to the situation when the whole world, as well as China itself, is enjoying a great number of cheap goods from China. Approximately 60% of Chinese export is manufactured by foreign invested businesses, among which are American firms (ibid). So, the USA and other world countries have received cheap goods and cheap labor. On the negative side, outsourcing of jobs, as well as export of capital from the US to China, has not made everybody happy. These business transactions mean that Americans, in this case, do not get the jobs they otherwise would. So, though moving, for example, a factory from the US to China is financially justified and raises US gross national product, it has a negative impact on the US employment rates, especially in the short run (Chow 3). Furthermore, interrelations and interdependence of countries’ economic and financial systems makes the states more vulnerable to each other’s problems. The 2008 financial crisis of the US, for instance, has spread to other countries and became a global financial crisis as a result globalization. So, though economic and financial globalization helps businesses to earn more and countries – to develop their economies, it exposes the same countries to the risk of being heavily influenced by and dependent on the economic and financial systems of the neighbors. Financial and economic globalization, though helps poor or developing countries to strengthen their positions, is a “serious impediment to global financial stability” (Kose et al 2). Political globalization is very interrelated with financial and economic ones because it is involved in regulation of foreign and international policies of world countries. Political globalization, as Woods outlines, leads to an “interplay of economics and politics in world affairs” (Woods 277). It makes world governments be very careful in choosing exchange rate and interest rate policies, because of the existence of global capital markets. Political globalization has also led to the creation of such international institutions as the UNO, World Bank and International Monetary Fund. While all such organizations aim at regulating and improving the world’s economic and political situations, it is obvious that stronger countries, like the US, have more power to set rules for the world. Among the advantages of political globalization is some standardization or laws and regulations, as well as creation of institutions that support and help countries in their political decisions. In addition, it unifies states in their attempts to fight such international problems as terrorism or drugs. For example, a research conducted by Vadlamannati shows that political globalization and influence of international organizations on internal politics of African countries have led to a reduction in human rights violation in those countries (Vadlamannati 13). So, political globalization is a good thing because it supports “peacekeeping/peace-building, development, environmental protection, protection of human rights, and the maintenance of the rule of law internationally” (Social Science Research Council). It has also lowered trade and political barriers between world countries At the same time, political globalization has led “to a shift of power from sovereign states to technologically advanced global elites and private multinational (oftentimes nonnational) interests” (Panel on High-Level Panel on Globalization and the State 3). In particular, it can be said that international terrorism of Islamic fanatics is an oppositional reaction to the intervention of stronger and wealthier countries into the internal politics of the Islamic states. In terms of protecting human rights political globalization has much in common with socio-cultural one. Social and cultural globalization refers to spreading ideas, information, people and cultural values across the nations. On one hand, socio-cultural globalization is a positive thing because it promotes freedom of information – people can communicate more, share ideas, beliefs and traditions, and reduce cultural proximity (2010 KOF Index of Globalization 2). On the other hand, this may lead to assimilation of some nations, especially if it is interaction between a small and a large nation. “Interactions on international platforms during the presentations of cultural and artistic values” promoted by globalization, as Akgul (1566) points out, may initiate and intensify the process of assimilation. Among the positive aspects of socio-cultural globalization is the spread and popularization of different cultures around the world. On the negative side, however, is so called “Americanization” of cultures. Multinational corporations are often blamed for imposing their cultures onto local societies. McDonald’s, Nike or MTV can be named as the brightest examples. Ability to share knowledge and information, being a benefit of socio-cultural globalization, is one of the reasons, along with financial and economic globalization, for technological globalization, which has led to the expansion of transnational technological diffusion (Boutin 10). Companies disperse their R&D and manufacturing facilities around the world, thus stimulating both domestic and host economies. At the same time, technological globalization causes situations when technological ‘leads’ of one countries come into possession of others (Boutin 12). To sum up, it is worth noting that globalization, while beneficial for some, does bring certain disadvantages to others, both individuals and societies. It is a very complex process that touches all the spheres of people’s lives. Consequently, just like the majority of internal processes of each country, globalization evokes both positive and negative consequences. On a positive side are, definitely, the spread of technologies, free trade, and an increase in exchange of commodities between the countries. Globalization brings economic and financial development to less developed countries, and new business opportunities to the whole world society. Still, it cannot be said that globalization can be made to work for all, because advantages in some aspects bring disadvantages in others. For example, the spread of communication and Internet technologies has allowed businesses to outsource jobs from poorer countries to take advantage of the lower wage rates. As a result, home country professionals either lose their jobs or have to work for lower salaries. Similarly, outsourcing of business processes, while is a great driver for India’s economy, has lead to displacement of some service-sector jobs in developed countries (Kuruvilla 39). Globalization diminishes the importance of borders and, supported by the Internet, allows for free movement of information. As a result, it is becoming more and more difficult for governments to control and suppress information they prefer to restrict. The Internet even provides large companies with opportunities to show self-governing behavior (Anderson). References 2010 KOF Index of Globalization. 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