THE CONTEMPORARY WORLD GLOBALIZATION What is Globalization? Globalization is a term used to describe the changes in societies and the world economy that are the result of dramatically increased trade and cultural exchange. In specifically economic contexts, it refers almost exclusively to the effects of trade, particularly trade liberalization or "free trade". Globalization concerns all of these things. It is a common belief that globalization plays a role just at international levels of trade and commerce, but the fact is that it has played an important role in making our lives much more comfortable too. The phones, apparels, gadgets or accessories that we use in our day-to-day life are be available to us through globalization. Knowingly or unknowingly, we are all under the impact of globalization, and more importantly it has helped in bringing international peace and justice to mankind. Globalization can mean: ➢ The formation of a global village - closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding and friendship between "world citizens", ➢ Economic globalization - "free trade" and increasing relations among members of an industry in different parts of the world (globalization of an industry), with a corresponding erosion of National Sovereignty in the economic sphere. Characteristics of Globalization ➢Connectivity ➢Borderless Globe ➢Free trade ➢Cultural Diversity ➢Mobility ➢Information Technology changes Signs of Globalization ❖Increase in international trade at a faster rate than the growth in the world economy Increase in international flow of capital including foreign direct investment ❖Greater transborder data flow, using such technologies such as the Internet, communication satellites and telephones ❖Greater international cultural exchange, for example through the export of Hollywood and Bollywood movies. ❖Some argue that even terrorism has undergone globalization. Terrorists now have attacked places all over the world. ❖Spreading of multiculturalism and better individual access to cultural diversity, with on the other hand, some reduction in diversity through assimilation, hybridization, Westernization, Americanization or Sinicization of cultures. ❖Erosion of national sovereignty and national borders through international agreements leading to organizations like the WTO and OPEC Signs of Globalization ❖Greater international travel and tourism ❖Greater immigration, including illegal immigration ❖Development of global telecommunications infrastructure ❖Development of a global financial systems ❖Increase in the share of the world economy controlled by multinational corporations ❖Increased role of international organizations such as WTO, WIPO, IMF that deal with international transactions ❖Increase in the number of standards applied globally; e.g. copyright laws Anti- globalization ◦ Many anti-globalism activists see globalization as the promotion of a Corporatist agenda, which is intent on constricting the freedoms of individuals in the name of profit. ◦ They also claim that increasing autonomy and strength of corporate entities increasingly shape the political policy of nation-states. ◦ Globalization imposes credit based economics, resulting in unsustainable growth of debt and debt crises. Pro-globalization (Globalism) ◦ Supporters of free trade point out that economic theories such as comparative advantage suggests that free trade leads to a more efficient allocation of resources, with all those involved in the trade benefitting. ◦ In general, they claim that this leads to lower prices, more employment and better allocation of resources. Globalization in the Philippines The country is taking part in the process of globalization ever since the country signed agreements with World Trade Organization in 1995. Now, globalization is very effective in the Philippines, it has allowed major changes in the nation like more labor, and more Filipino and foreign companies has emerged in the nation in order to help the country’s developing economy. Globalization can make the Philippines into a better nation if the Philippine leaders to make their economy more advance through global trading and allowing more foreign investors to the help boost the economy. And by accomplishing those goals, the Philippines should be able to reduce the poverty level as well as increase labor force for job opportunities for those that are in need for a living. However, since the poverty level is still increasing, most Filipinos has managed to find work overseas and they have managed to seek better living than in the Philippines. The most effective factor in the Philippines is education. The society’s mentality is to be educated and it’s with education that people in the nation see their opportunity for a better life in the future. Advantages ✓Peaceful Relations - Most of the countries have resorted to trade relations with each other in order to boost their economy, leaving behind any bitter past experiences if any. ✓Employment - Considered as one of the most crucial advantages, globalization has led to the generation of numerous employment opportunities. Companies are moving towards the developing countries to acquire labor force. ✓Cheaper Prices - Globalization has brought in fierce competition in the markets. Advantages ✓Education - A very critical advantage that has aided the population is the spread of education. With numerous educational institutions around the globe, one can move out from the home country for better opportunities elsewhere. ✓Product Quality - The product quality has been enhanced so as to retain the customers. Today the customers may compromise with the price range but not with the quality of the product. Low or poor quality can adversely affect consumer satisfaction. ✓Communication - Every single information is easily accessible from almost every corner of the world. Circulation of information is no longer a tedious task, and can happen in seconds. The Internet has significantly affected the global economy, thereby providing direct access to information and products. Advantages ✓Free Trade - Free trade is a policy in which a country does not levy taxes, duties, subsidies or quota on the import/export of goods or services from other countries. There are countries which have resolved to free trade in specific regions. This allows consumers to buy goods and services, comparatively at a lower cost. ✓Travel and Tourism - Globalization has promoted tourism to great heights. International trade among different countries also helps in increasing the number of tourists that visit different places around the world. ✓External Borrowing - With the help of globalization, there is opportunity for corporate, national, and sub-national borrowers to have better access to external finance, with facilities such as external commercial borrowing and syndicated loans. Disadvantages ▪ Health Issues Globalization has given rise to more health risks and presents new threats and challenges for epidemics. - the dawn of HIV/AIDS. Having its origin in the wilderness of Africa, the virus has spread like wildfire throughout the globe in no time. ▪ Food items are also transported to various countries, and this is a matter of concern, especially in case of perishable items. ▪ Loss of Culture With large number of people moving into and out of a country, the culture takes a backseat. People may adapt to the culture of the resident country. They tend to follow the foreign culture more, forgetting their own roots. This can give rise to cultural conflicts. ▪ Uneven Wealth Distribution It is said that the rich are getting richer while the poor are getting poorer. In the real sense, globalization has not been able to reduce poverty. Disadvantages ▪ Environment Degradation The industrial revolution has changed the outlook of the economy. Industries are using natural resources by means of mining, drilling, etc. which puts a burden on the environment. ▪ Disparity Though globalization has opened new avenues like wider markets and employment, there still exists a disparity in the development of the economies. Structural unemployment owes to the disparity created. Developed countries are moving their factories to foreign countries where labor is cheaply available. ▪ Conflicts It has given rise to terrorism and other forms of violence. Such acts not only cause loss of human life but also huge economic losses. ▪ Cut-throat Competition Opening the doors of international trade has given birth to intense competition. This has affected the local markets dramatically. The local players thereby suffer huge losses as they lack the potential to advertise or export their products on a large scale. Therefore the domestic markets shrink. Integration of Economies ◦ The increasing reliance of economies on each other ◦ The opportunities to be able to buy and sell in any country in the world ◦ The opportunities for labour and capital to locate anywhere in the world ◦ The growth of global markets in finance Stock Markets are now accessible from anywhere in the world. Integration of Economies Made possible by: ◦ Technology ◦ Communication networks ◦ Internet access ◦ Growth of economic cooperation – trading blocs (EU, NAFTA, etc.) ◦ Collapse of ‘communism’ ◦ Movement to free trade Implementing Technology tools to promote Globalization ➢Facebook - The ability to communicate with people all over the world. ➢Skype (video chatting)- The ability to have a live visual meeting with people allover the world. ➢Twitter - The ability to communicate and share information with people all over the world. ➢WikiSpaces - The ability to share ideas, thoughts and images with people all over the world. ➢Phones - The ability to verbally and/or visually communicate with people all over the world. ➢Microsoft Office - The ability to verbally and visually communicate with people through a office setting through email, live chat and instant messaging. ➢WebQuest - Teachers can create a WebQuest for students to participate in an educational journey on various topics while using the world wide web. ➢Podcast - Teachers can create a podcast for students to listen to using media. Teachers can use this for creating assignments and students can listen to the podcast as many times as they want. ➢E-mail - students can use email to communicate with: ▪ Students in other countries ▪ People and/or businesses in the community ▪ Pen-Pals (examples: service men and women, elderly, ill) ▪ Organizations, Companies and Corporations all over the world ▪ Teachers and Peers Trade versus Aid? Benefits of Trade: ◦ Increased choice ◦ Greater potential for growth ◦ Increase international economies of scale ◦ Greater employment opportunities Trade versus Aid? Disadvantages of trade: ◦ Increase in gap between the rich and the poor ◦ Dominance of global trade by the rich, northern hemisphere countries ◦ Lack of opportunities for the poor to be able to have access to markets ◦ Exploitation of workers and growers Corporate Expansion Multi-national Corporation or Trans-national Corporations (MNCs or TNCs) businesses with a headquarters in one country but with business operations in a number of others. Characteristics: ◦ Expanding revenue ◦ Lowering costs ◦ Sourcing raw materials ◦ Controlling key supplies ◦ Control of processing ◦ Global economies of scale Corporate Domination Key Issues: ◦ Damage to the environment? ◦ Exploitation of labour? ◦ Monopoly power ◦ Economic degradation ◦ Non-renewable resources ◦ Damage to cultures Other Issues: ◦ Accountability of Global businesses? ◦ Increased gap between rich and poor fuels potential terrorist reaction ◦ Ethical responsibility of business? ◦ Efforts to remove trade barriers Importance of Globalization ❑It is important because it opens many doors of various fields of study. ❑It broadens the educational horizons for students. ❑Technology in the world today has made it easier for students to find more in depth information that they are looking for to use for educational purposes. ❑Students can also learn more about other countries because of the impact of globalization. Effects of Globalization ❑Changed Food Supply • Food supply is no longer tied to the seasons. We can buy food anywhere in the world at any time of the year. It broadens the educational horizons for students. ❑Division of Labor • Because MNCs search for the cheapest locations to manufacture and assemble components, production processes may be moved from developed to developing countries where costs are lower. ❑Less Job Security • In the global economy jobs are becoming more temporary and insecure. A survey of American workers showed that people now hold 7 to 10 jobs over their working life.. Effects of Globalization ❑Damage to the Environment • More trade means more transport which uses more fossil fuels and causes pollution. Climate change is a serious threat to our future. ❑Cultural Impact • Websites such as YouTube connect people across the planet. As the world becomes more unified, diverse cultures are being ignored. MNCs can create a monoculture as they remove local competition and thereby force local firms to close. ❑Increase in anti-Globalization Protests • There is a growing awareness of the negative impacts of globalization. People have begun to realize that globalization can be challenged by communities supporting each other in business and society and through public protest and political lobbying. STUDY FOR A SHORT QUIZ!
