Impact of Globalization on Development

Topics: Globalization, Economics, International trade Pages: 5 (1582 words) Published: July 18, 2013

Globalization is the buzzword of today. The phenomenon of globalization rapidly swept across the world forcefully and powerfully. Economies of the world are being increasingly integrated as new technology and communication has brought people together. We often hear the phrase that the 'world has become a global village' - which itself signifies how much has changed in the world in the past few decades. Financial and industrial globalization is increasing substantially and is creating new opportunities for both industrialized and developing countries. The largest impact has been on developing countries, who now are able to attract foreign investors and foreign capital. This has led to both positive and negative effects for those countries. Economically new parts of the world have opened to capitalist activities. The spread of capitalist activities has been part of globalization process which ties up well with the liberals believe in the possibility of progress (Baylis, J., et al. (2008, p. 110). Free trade is the reduction or removal of commercial barriers between countries. This allows a freer flow of labor and goods between member countries in a trade pact. As free trade agreements become more common around the globe, the positive impact on developing countries has been touted as one of their greatest successes. There are several advantages to developing countries that participate in free trade. Free trade is an economic practice whereby countries can import and export goods without fear of government intervention. Government intervention includes tariffs and import or export bans or limitations. Free trade offers several benefits to countries, especially those in the developing stage. According to a widely used definition, a developing country is a nation with low levels of economic resources and/or low standard of living. Developing countries can often advance their economy through strategic free trade agreements. Increased Resources

Developing countries can benefit from free trade by increasing their amount of or access to economic resources. Nations usually have limited economic resources. Economic resources include land, labor and capital. Land represents the natural resources found within a nations borders. Small developing nations often have the lowest amounts of natural resources in the economic marketplace. Free trade agreements ensure small nations can obtain the economic resources needed to produce consumer goods or services. By using a country’s comparative advantage, or what they can produce at a lower opportunity cost than other countries, they can get all the benefits of trade. If every country has a comparative advantage that means that everyone can gain from trade. There is remarkable evidence that globalization is helping countries expand and achieve higher incomes or a higher GDP Improved Quality of Life

Free trade usually improves the quality of life for a developing nations citizens. They can import goods that are not readily available within their borders. Importing goods may be cheaper for a developing country than attempting to produce consumer goods or services within their borders. Many developing nations do not have the production processes available for converting raw materials into valuable consumer goods. Developing countries with friendly neighbors may also be able to import goods more often. Importing from neighboring countries ensures a constant flow of goods that are readily available for consumption. In countries with a higher degree of globalization, policies tend to support more accountability in the private and public sectors. These nations are more likely to maintain courts that recognize property rights and enforce the rule of law. Their governments are more effective and less corrupt. Policies in these more globalized countries tend to be more stable, essential for long-term planning by business. (Fisher, 2006) Better Foreign...

Bibliography: Bhagwati, J. (n.d.).
Fisher, R. W. (2006). Globalizations Hidden Benefits. Yale Global .
Yutzis, M. J. (2001). The Argentine Crisis: Economy, Society and Ethics in Times of Globalization . Journal of Lutheran Ethics .
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