Nics Have Been and Continue to Be the Driving Force of Globalisation. Discuss.

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NICs have been and continue to be the driving force of globalisation. Discuss.

An NIC stands for a Newly Industrialised Country. It is a term used to describe a country that has moved away from an agriculture-based economy and into a more industrialised, urban economy. These countries have a high growth rate. Current NICs include China, India, Brazil, Malaysia, Mexico, South Africa, Philippines, Thailand and Turkey. The average growth rate between these countries is approximately 7.64% compared to the world average of 3.7% (2011). The average Gross Domestic Product (GDP) per capita for these NICs is US$10,769 compared to the world average GDP per capita of US$12,000. GDP is a useful indicator of development and a great measure for comparing differences between countries, therefore allowing a clear differentiation between countries that are Highly Industrialised Countries (HICs), Newly Industrialised Countries (NICs) or Low Industrialised Countries (LICs). The Human Development Index (HDI) is another strong indicator of development, it includes a combination of statistics: life expectancy, education and income. The average HDI of these NICs is approximately 0.6874. The world average HDI is 0.862.

India is now an NIC, as the IT services boom has transformed the country’s economy, which is now growing at more than 9% per year, the same rate as China. India’s HIC is 0.547(2011 estimate). Since China opened up its markets to the West in the 1980s, the city of Shanghai has transformed into a booming metropolis consisting of about 21 million people. Shanghai accounts for 30% of China’s foreign exports and attracts 25% of all foreign investment into the country. The GDP of Shanghai alone is US450 billion! China’s HDI is 0.867 (2011 estimate).

Globalisation is the stage of processes and impacts that occur at a global scale, usually economic systems, but it can include physical systems (global warming) and socio-cultural systems (fashion, music, film industry). Globalisation can be measured using the Globalisation Index, which tracks and assess changes in the 4 key components of global integration. Another measure of globalisation is the KOF Index of Globalisation. This calculates the overall index of globalisation and sub-indices referring to actual economic flows, economic restrictions, data on information flows, data on personal contact and data on cultural proximity.

NICs have been and continue to be the driving force of globalisation. Manufacturing tends to occur mainly in industrialised countries. Globally, manufacturing output continues to increase and most manufacturing still occurs in industrialised countries. Although relative contribution of manufacturing to most industrialised countries economies has declined, manufacturing remains fundamental to all economies. Many of the new industrialised countries are dramatically increasing their manufacturing output, by establishing their unique multi-nationals and implement manufacturing plants in developed countries. An example of a country doing this is South Korea. NICs have a variety of advantages over fully developed countries, as they are able to benefit from cheap labour costs, lower business taxes, cheaper land and fewer environmental controls. Multi-nationals are hugely responsible for a large majority of the rise in globalisation, for example; the introduction of Trans-national companies (TNCs). These multi-nationals have huge benefits, i.e. they have generated millions of new jobs in NICs, however; they have also lead to social, political and economic problems within a country, as well as between countries. For example, Uganda, a very poor country with a GDP per capita of just $1,300 (2011), has been forced to lower its prices of exporting coffee, which is what its economy relies on. Coffee prices have fallen by 70% since 1997, costing exporters in developing countries $8 billion in lost foreign-exchange earnings. This divides the gap between the rich and...
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