Globalisation brought everyone around the world closer, not only in the virtual world but also in the real world. As the distance between people get closer, it interlinks life here in Singapore to the life of people who are miles away from us. This also means any disaster or financial crisis that occurs miles away can have an impact on Singapore’s economy. So what exactly is globalisation?
“Globalisation refers to an ongoing process of economic and social integration of economies around the world. The key drivers of globalisation are trade and the movement of capital and people.” (The Straits Times, Review, pA26). For the purpose of this assignment, the advantages and the disadvantages that globalisation will be discussed.
Starting with the advantages of globalisation from the local’s point of view. Globalisation remove or reduce the barriers between nations by the means of transportation and communication. Gross domestic product (GDP) has always regard as the measure of the nation’s economy health. Given Singapore’s strategic trading location in South East Asia, it attracts foreign investment and this caused globalisation to take place rapidly and drove Singapore’s GDP higher each year. Since globalisation has a positive impact on our GDP, it means that Singapore can enjoy the benefits of higher income, lower unemployment, lower government borrowing, improve public services and attracting foreign investments. As more Multi-National Companies (MNCs) set up their businesses in Singapore, job opportunities are created and that bring down the unemployment rate. With low unemployment rate and high GDP, the locals have better purchasing power and this led to the higher living standard of living of people as they are more likely to spend on luxury goods and services.
From the Western’s point of view, they see Singapore as a treasure trove. With Singapore’s world class transportation facilities such as Changi airport and sea port, these make Singapore a very attractive investment choice.
Investors can also build their portfolio with the combination of domestic and foreign securities and in combination of different currencies. Globalisation enables MNCs to operate their business with cheaper labour cost and also allow them to diversify their financial risks.
One of the disadvantages that globalisation has brought about from the local’s perspective is the steep market competition for Small and Medium Enterprises (SMEs) when MNCs come into the picture as their big brand names and capital capacity could potentially drive these SMEs out of business. Rapid globalisation in Singapore also brought about the widening of the income gap between the rich and the poor which results in social tension between these two income groups.
Globalisation has also led to a brain drain as Singapore is losing local skilled workers who migrate to foreign countries. These skilled workers move around the globe in search for better employment. Another negative impact of globalisation is that it causes Singapore’s exports to decrease as MNCs are constantly looking for cheaper rental and labours in neighbouring countries such as India and China. Local culture is lost as the global brands dominate the consumer market and pop culture from the West has spread to Singapore and to some extent, created negative influence on local youths as they lose interest in Singapore’s local culture and traditions.
Being a multi-culture nation, Singapore’s culture remains as one of the important factors.
“Westernized” and losing their “Asian” identity. It responded strongly by asserting and defending Singapore’s identity as an Asian nation. It began promoting Confucian/Asian values as a counter-discourse against Western ideas of modernity.” (Journal of Alternative Perspectives in the Social Sciences ( 2009) Vol 1, No 3, 983984).
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The profits that are generated by the MNCs are usually transferred out to foreign country than being use for the branch country in the local country. Lastly from the Western’s point of view on the negative impact of globalisation are the workers who are stationed in other branches of the headquarter company may be affected in the similar ways as it would on the local workers. Having to say that, these workers have the potential to lose their home roots and the bond between the home-grown company and the headquarter company may be weaken as well. The MNCs can also face with brain drain issue as well.
From the above analysis, the advantages and disadvantages that comes with the globalisation from the perceptions of locals and westerns were discussed. While globalisation brings more opportunities for all, it definitely also bring negative issues such as social and economic. Therefore, it is difficult to determine if globalisation is good or evil. In my opinion, globalisation is a necessary evil which is important to the survival of a nation.
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