Globalization to Beat Inequality
Globalization to Beat Inequality
Indeed, globalization is the most popular trend in international economics. Increasing integration of world markets and exchanges of information and technology are definitely expected to help the least developed nations, thereby bridging the gap between the haves and the have-nots. Thus, the thesis of Bhagwati’s (2004) book, In Defense of Globalization – that, in fact, globalization helps the poorest people of the world – must be agreed with. After all, foreign direct investments are an extraordinary boost for the economies of the developing world.
Moreover, by importing and exporting more goods and services than before, a developing nation may very well increase its income and also improve the standard of living of its peoples. It is generally believed that an increase in international trade is accompanied by an increase in income inequality, seeing that the majority of the people in developing nations are poor and cannot afford to purchase relatively expensive foreign goods in the local market, nor form gigantic enterprises to sell to the foreign public.
Furthermore, globalization involves the risk of foreign companies taking advantage of the undeveloped regulatory structures in developing nations. As an example, a foreign water company in Argentina, after the mass privatization of Argentinian business, was said to have been very ethical before it entered Argentina. The company had connections with France and the United States. All the same, the company turned to poor service in Argentina soon after privatization. The water company was eventually taken over by the Argentinian government for its careless, irresponsible behavior (Hacher 2007).
If managed correctly, though, globalization is expected to help our world in significant ways. The famous observation of Friedman (2000) must also be considered in this analysis: “No two countries with McDonald’s have fought a war against each other since each got its McDonald’s. ” Indeed, peace is conducive to global economic growth. But, so is equality. Even though the gap between the haves and the have-nots has been widening in recent years, good management of globalization may work wonders for the global economy. The World Trade Organization protests globalization on behalf of the poor nations.
As an effect of globalization, the developing nations – just because they are doing business with the richer ones – are asked to accept the standards of environmental and labor protection that only the rich nations are able to afford at this point in time. Seeing that one of the accompaniments to globalization is acceleration, the World Trade Organization wants to emphasize that developing nations must be given more time to adjust to change. The fact that these nations require more time to adjust to change is illustrated by the experience of India with respect to child labor law.
In point of fact, child labor law in India took a long time to be developed. The law was implemented at various levels over the course of many years, the reason being that India required children to work in its factories because of the Indian economy’s dependency on cheap labor. Besides, the parents of Indian children who worked could not afford to support their children that did not work (Pandey 2006). The debate over agricultural trade is by and large the most important issue for the World Trade Organization to deal with.
Pitting rich nations against the poor, the debate emphasizes that the world’s poorest nations have few exports to offer besides basic agricultural products. Given that international trade is a necessity in today’s internationalized world, developing nations must compete against the giant nations, such as the United States and Japan. Developed nations support farmers with subsidies. If they do not support their own farmers, the latter would go out of business. This assistance – amounting to approximately three hundred billion dollars every year – increases the supply of basic agricultural products on the world market.
As the price of agricultural produce is lowered, it is the poor nations that are hurt. In other words, the average cow in the European Union receives a daily subsidy of more than two U. S. dollars, and this figure is greater than the daily wage of twenty percent of the world’s population (Kaplan & Calzonetti 2005). Although Blinder (2006) is correct to state that the developed world would have to deal with tremendous change if “offshore outsourcing” is highly popularized in the coming years, it is not the rich world that requires help at this point in any case.
Moreover, by mostly considering the changes that the rich world would have to experience, there is no way that economists would be able to convince the developed nations to effectively work with the developing nations. Therefore, it is essential to popularize offshore outsourcing by describing the benefits that both the developed and the developing world would accrue by means of it. After all, the developed world is in an excellent position to grant more jobs to people in the developing world. It would certainly be a win-win situation.Furthermore, it would help to bridge the widening gap between the haves and the have-nots, thereby ensuring sustainable development too.
REFERENCES Bhagwati, JN 2004, In Defense of Globalization, Oxford University Press, New York. Blinder, AS 2006, ‘Offshoring: The Next Industrial Revolution? ,’ Foreign Affairs, Mar/Apr 2006, available at http://www. foreignaffairs. org/20060301faessay85209-p0/alan-s-blinder/offshoring-the-next-industrial-revolution. html. Friedman, TL 2000, The Lexus and the Olive Tree: Understanding Globalization, Anchor Books,
New York. Hacher, S 2007, ‘Argentina Water Privatization Scheme Runs Dry,’ Global Policy Forum, 26 Feb 2007, available at http://globalpolicy. igc. org/socecon/bwi=wto/wbank/2004/0226argwater. htm. Kaplan, E, & Calzonetti, C 2005, ‘The WTO’s Troubled ‘Doha Negotiations,’ Council on Foreign Relations, 9 Dec 2005, available at http://www. cfr. org/index. html. Pandey, G 2006, ‘India Tightens Child Labor Laws,’ BBC News, 10 Oct 2006, available at http://news. bbc. co. uk/2/hi/default. stm.
University/College: University of Arkansas System
Type of paper: Thesis/Dissertation Chapter
Date: 19 December 2016
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