Globalisation Has Allowed The Economies Of Poor Countries

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“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
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The Service industry accounted for 50% of GDP at the beginning of the 20th century, India’s advantage was having a large English-speaking workforce (50 million), lower labour costs (for every 1000 jobs relocated to India, a British company would save $10million), and the fact that many developed countries had a significant ICT skills shortage. Although 50% of GDP is accounted for by the service industry, the primary sector still dominates the country in terms of employment, and 70% of the population is still engaged in agriculture and other primary activities, but only contributing 23% of GDP. Farming is merely at subsistence level which has led to high levels of rural poverty, and still 41 % of the population is living on less than $2 a day. The growth of the service industry due to companies such as British Airways, Lloyds TSB, Barclays, British gas locating there call centres that deal with sales and customer enquiries in India and the vast IT sector has led to a huge gap between the rich and poor. In Mumbai, for example there is a huge slum where 1million people live per square mile, 500 people share one toilet, the sewers and water share the same pipes, resulting in 4000 sicknesses a day, and deaths every day due to dirty water. In contrast to the slums a $2 billion home has been built, with 27 floors, and only one family live there. This is an example of how globalisation and the investment of TNCs in LEDCs has widened the poverty gap. Furthermore the Richer proportion of the country will be able to afford to send their children to school, therefore giving them an education which they can use to create a better life for themselves, where as the proportionately larger segment of the country which cannot afford school and instead see their children as a source of income,

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