“Globalisation Has Allowed the Economies of Some Poor Countries to Develop, but Such Development Has Often Led to Increasing Gaps Between Rich and Poor in Those Countries” Discuss This Statement with Reference to

Topics: Economy, Poverty, World Bank Pages: 4 (1296 words) Published: June 3, 2011
“Globalisation has allowed the economies of some poor countries to develop, but such development has often led to increasing gaps between rich and poor in those countries” Discuss this statement with reference to contrasting countries you have studied.

Globalisation is the increasing interconnection in the world’s economic, cultural and political systems. Philippe Legrain described globalisation as ‘the way in which peoples lives are becoming increasingly intertwined with those of distant people and places around the world in economic, cultural and political terms’ TNCs and nation states are the two main players in globalisation. In 1975 there were around 7,000 TNCs, today there are more than 60,000 all impacting the development levels of LEDCs. The ‘Brandt line’, whereby the north accounts for 80% of Global GDP but contains only 20% of the population and the South contains 80% of the world’s population but only accounts for 20% of Global GDP, separates the world. But slowly this is changing. There is no doubt that globalisation has allowed the economies of some poor countries to develop, and move along the development continuum, For example for ‘Barbie’ in Taiwan and phase 1, 2 and 3 NICs. The emergence of free market ideas and the deregulation of world financial markets meant that the financial companies were now able to scour the world looking for the best returns on their capital. This accompanied by improved transport and communications at the end of the 19th century meant TNCs developed, expanded and moved to developing countries in search of cheaper land, cheaper workforce, more lenient environmental laws and government incentives.

There is no doubt, in countries such as India and China that globalisation has caused development, but such development has led to an increasing gap between the rich and poor. Within China, after the 1990s industry was liberalized and private companies and TNCs were encouraged to develop in some sectors of industry....
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