Inic’s Have Been and Continue to Be the Driving Force of Globalization. to What Extent Do You Agree with This Statement?’

Topics: Globalization, Multinational corporation, International trade Pages: 6 (1886 words) Published: January 26, 2013
‘NIC’s have been and continue to be the driving force of globalization. To what extent do you agree with this statement?’

A newly industrialized country (NIC) is a socioeconomic classification applied to several countries including Thailand, China, India, Malaysia, Philippines, South Africa and Mexico. NICs have not yet reached a developed status but have, in an economic sense, overtaken their developing counterparts. Another characterization of NICs is that of nations undergoing rapid economic growth (usually export-oriented). Globalisation is a set of processes leading to the integration of economic, cultural, political and social systems across geographical boundaries. It refers to increasing economic integration of countries, especially in terms of trade and movement of capital. But the question is, what was the main motivating factor behind this massive increase in economic, cultural, political and social systems across geographical boundaries? Was it as some have argued the rapid growth of NICs such as China, India and South Africa? Or were other factors such as Transnational Corporations (TNCs) more influential?

The classification of countries as NICs has only happened in the last 30 years. In 1970 when the Four Asian Tigers; Hong Kong, Singapore, South Korea, and Taiwan all became classed as NICs in the 1970s and 1980s, with exceptionally fast industrial growth since the 1960s; all four economies have since graduated into advanced economies and high-income economies. There is a clear distinction between these countries and the nations now considered to be NICs. In particular, the combination of an open political process, high GNI per capita, and a thriving, export-oriented economic policy has shown that these countries have now not only reached but exceeded the ranks of many developed countries. NICs such as China, India, Mexico, Philippines, South Africa and Thailand are all part of a trade bloc classified as G20. Trading blocs are groups of nations who form an economic union or customs union. Trade bloc’s speeds up the process of globalization. G20 has expanded to 20 countries and accounts for 60% of the world's population, 70% of its farmers and 26% of world’s agricultural exports .As well as increased integration amongst members of a trading bloc, it is argued trading blocs help globalisation through making global negotiations easier.

There are several factors that make NICs a contributor to globalisation. Firstly, most NICs such as Thailand have shifted from agriculture to industrial economies. Thailand, traditionally an agricultural country and a major food exporter, is undergoing rapid rates of structural change and industrial growth. Industrial output has been growing at double-digit rates in recent years and is expected to continue to do so well into the twenty-first century. Already, industry's share of the Gross Domestic Product (GDP) is more than twice that of agriculture's. By shifting from an agricultural based economy to an industrial one, this has increased trade. This is because in a rural agricultural economy the goods were subsistence based and therefore did not attract much trade. By industrializing, Thailand has been able to produce manufactured goods and therefore trade, thus contributing to the global economy. Industrialization has also allowed workers to develop skills and this encouraged emigration from Thailand to ……for example. Industrialization has also encouraged immigration from China for example. The complexity of manufactured goods requires specialised resources which are used to make individual components. These therefore need to be sourced from different countries to construct the final product which is often then exported to other countries; this is a classic example of globalisation.

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