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How Globalization Effects Third World Countries Essay

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Globalization refers to the ways in which capital; people, information and culture can now flow back and forth across national borders with a greater ease and greater rapidity than they had before this new phenomenon. Globalization, the growing integration of economies and societies around the world, was a word hardly used only a few years ago and now I doubt if there is a single country in the world where globalization isn’t being discussed. The global spread of the term is evidence that something very new is happening in the world but I’m not saying this new term is beneficial for all.

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This phenomenon has both positive and negative effects on third world countries but in the end it seems like only one party is benefiting, the rich. ” The poor are thus being doubly denied their right to life first when the resources that sustain them are taken away from them in a free trade world, and then when the pollution and waste of the global economy are unequally and unjustly piled on them.” (Global Capitalism p.128)Though globalization has been one of the most hotly debated topics in international economics over the past few years there has been some bright sides. Rapid growth and poverty reduction in China, India, and other countries that were poor 20 years ago, has been a positive aspect of globalization. Another positive attribute according to Thomas l. Friedman, in his book, The Lexus and the Olive Tree, is globalization “increases the incentives for not making war in more ways than in any previous era in modern history.””

To begin, it is important to explain the meaning of The Lexus and the Olive Tree. The Lexus refers to technological advancement and growth, where the Olive Tree refers to traditional roots and stability. The basic premise of the book is the conflict between the two within cultures, economies, and individuals and how it if possible, at all, to bring the two camps together.” (Friedman p.31-34)But globalization has also generated significant international opposition over concerns that it has increased inequality and environmental degradation. The proponents of globalization cite numerous benefits to be gained by underdeveloped countries though greater access to the goods and services that transnational companies can provide. Anti-globalization activists, on the other hand, point to many examples in the developing world where globalization has robbed indigenous populations of traditionally held land or water rights, disrupted cultural and social values, and disturbed lifestyles.

Problem StatementWhat I intend to examine in this paper is the comparison trend of capitalism in the late 19th – early 20th century with the trend of globalization today. Explaining that globalization of the world economy has the potential to bring both great benefit and great hardship to third world populations, but like capitalism, globalization without proper checks and balances could become a runaway force, knowing no moral or ethical boundaries. Though globalization offers extensive opportunities for worldwide development, in my opinion this process is not progressing evenly.

I intend to prove that the richest of 225 people in the world have a combined wealth equal to the annual income of the poorest 47% of the world’s individuals. (Joshua Karliner) Countries that have been able to integrate with other nations are seeing faster growth and reduced poverty. However, many nations have not been so fortunate, especially in developing areas. One in four individuals across the world lives in abject poverty, without access to adequate food, clean water, sanitation, essential healthcare or basic education services.

This is both the principal moral issue facing the world as well as the utmost menace to the future security and stability of the planet. Many of today’s problems, such as war and conflict, mass migration, and environmental degradation are rooted in poverty and inequality.

Yet if globalization resembles early capitalism, the rise of international anti-globalization organizations is beginning to resemble the early development of trade unions in the western world. While pro-globalization forces still consider these groups to be nothing more than a collection of cranks and misfits, incapable of understanding the global economy, there is growing evidence that these groups are becoming a force to be reckoned with:”… the process of globalization also has created alliances once thought impossible. At the Seattle protests against the World Trade Organization in 1999 — and later at “anti-globalization” protests in Washington, DC, Los Angeles, Prague and Quebec City — debt relief activists, Green party members, health care advocates, labor leaders, development economists, religious groups and hundreds of thousands of young people marched together.” (AlterNet par. 2)

Interestingly, the same forces that facilitate economic globalization also greatly enhance the abilities of the anti-globalization faction to mobilize against it. Greater communication, Internet use, travel, and news dissemination allow activists around the world greater access to each other and greater knowledge of difficulties being faced in developing countries. Of particular interest is the timeliness of the broadcast of information, this sometimes allowing activists to slow or stop projects, rather than just criticize them after the fact. Globalization can also put a spotlight on issues of international and local justice, giving people access to supporters that was never before available and helping to advertise problems that in earlier times would never have been picked up by the media.

Thus it seems possible that while developing countries very often have governments that actively promote the most ugly aspects of globalization, or are at least powerless to prevent them, the rising tide of grass-roots activism shared by both the developed and developing worlds may, in fact, be the beginning of an organization with the ability to curb and regulate globalization.

In order to have a clear understanding of globalization’s impact on third world and the developing world, it is important to understand exactly what globalization means. When discussing globalization many make the mistake of assuming that it is a merely or even primarily an economic process. However, globalization also has political and social implications.

The International Monetary Fund (IMF) sees globalization as an economic, and as a purely natural stage in human cultural and technological evolution stating:”Economic globalization is a historical process and the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through trade and financial flows. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across international borders.” (IMF par. 6)The IMF also assumes that globalization, because it is a natural occurrence, is a good thing.

From this point of view, the inequalities of wealth and poverty are the result of unequal globalization, and once that full globalization is reached, poorer countries will automatically benefit. The income gap between high-income and low-income countries has grown in recent decades. But it is wrong to jump to the conclusion that globalization has caused the divergence, or that nothing can be done to improve the situation. To the contrary: low-income countries haven’t been able to integrate with the global economy as quickly as others, partly because of their chosen policies and because of factors outside their control.

No country, least of all the poorest, can afford to remain isolated from the world economy. Every country should seek to reduce poverty. The international community should endeavor by strengthening the international financial system through trade and through aid in order to help the poorest countries integrate into the world economy, grow more rapidly, and reduce poverty. That is the way to ensure all people in all countries have access to the benefits of globalization. (IMF par. 48)Objective OverviewMy main reason for writing this paper on globalization effects on third world countries is because I’m from a developing country, Grenada.

Though it’s been many years sine I last visited my country of birth I’m still very interested in seeing this beautiful island successfully build up its economy. Also I want to be very much a cause of that development but I first needed to find out the general meaning of globalization and it’s effects on poverty stricken countries. As well as if globalization is helping or hindering my country as well as other developing nations.

During my research I’ve gained a better understanding of globalizations cause and effects. The trends of globalization, rapid technological advancements, free trade and emergence of trading communities present challenges to Grenada’s developing economy. The Caribbean region as a whole is struggling with the reduction of international aid funds, due to relatively strong performance on the UN Human Development Index, at the same time that the region’s traditionally agricultural based economies are turning to tourism for economic growth. In my opinion this hasn’t been enough for my country’s developing process.

Agricultural production, primarily of bananas, cocoa, mace, and nutmeg, has historically been the largest sector of Grenada’s economy, providing the majority of employment and foreign exchange earnings. However, between 1987 and 2000 agriculture declined from 18.7% of GDP to 9.7%. The sector was plagued by problems throughout this period, including the loss of preferential trade agreements with the EC, a mealy bug infestation that devastated crops, the collapse of a nutmeg price agreement with Indonesia, and quality control problems that halted all banana exports.

For example, “Critics point out that not only does the U.N. report depart from standard economic procedures like not correcting for price levels from country to country it hides numbers. Perhaps most egregiously, it compares gaps in income between the poorest and richest countries not individuals. Thus the economic circumstances of the citizens of tiny Grenada are put on a par with those of China, which has a population 12,000 times greater. Mistakes like these completely distort the record of globalization.” (The Rich Get Rich and Poor Get Poorer. Right? Let’s Take Another Look.)

During the months after American invasion, which was beneficial, the mass organizations were dismantled, the labor unions were reorganized, over half of all medical personnel were expelled, investment and tax codes were revised to favor foreign investment, and cooperatives and states enterprises were sold to private interests. Billboards that had inspired the population to work for justice, equality, development and national sovereignty were quickly replaced by those designed to inspire them to buy American consumer products. The quality of life for most islanders deteriorated in the period following the invasion despite infusions of American aid.

This is why I’m very interested in what globalization is doing for developing nations though I’m living a better life here; I’m still concerned in the countries progress. Although Grenada’s economy has been expanding, poverty is widespread. Though there is political freedom, the government is conservative and corrupt. And, in this era of neo-liberal globalization, the island’s brief socialist experiment is but a fading memory.

Lecture Review”The Era of Globalization” or is fast becoming the preferred term for describing the current times. Just as the Depression, the Cold War Era, the Space Age, and the Roaring 20’s are used to describe particular periods of history; globalization describes the political, economic, and cultural atmosphere of today. (Porter par. 3)Economic “globalization” is a historical process, the result of human innovation and technological progress. It refers to the increasing integration of economies around the world, particularly through trade and financial flows. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across international borders. (Globalization: Threat or Opportunity? IMF par. 6) I didn’t particularly agree with the IMF’s take on Globalization but as I further researched the IMF’s views I began to understand them.

Global free trade has caused worldwide environmental destruction in asymmetric pattern. The international economy is controlled by the corporations of the North who are increasingly exploiting Third World resources for their global activities. (Global Capitalism p.113) This is exactly how I feel about Grenada. Resources are being drained but nothing is going back into the country. The Vandana Shiva, author of this particular chapter in the book, really explains how I feel about globalization in Third World countries she further discuss,” It is the South that is disproportionately bearing the environmental burden of the globalised economy.”Joseph E. Stiglitz states,” IMF programs are typically dictated from Washington, and shaped by the short missions during which its staff members pore over numbers in the finance ministries and central banks and make themselves comfortable in five-star hotels in the capitals. There is more than symbolism in this difference: one cannot come to learn about, and love, a nation unless one gets out to the countryside.”(Globalization and Its Discontents, p.24)

He basically is saying the economist sent from the IMF should spend time in the country’s poorest areas not in the developed cities. I agree. He further says,” Statistic bear out what those who travel outside the capital see in the villages of Africa, Nepal, Mindanao, or Ethiopia; the gap between the poor and the rich has been growing, and even the number in absolutely poverty-living on less than a dollar a day-has increased.”A question was asked of author Thomas L. Friedman in his book The Lexus and the Olive Tree by an Egyptian woman, “Does globalization mean we just leave the poor to fend for themselves?” he stated, “After enough such conversations I realized that most Egyptians-understandably-were approaching globalization out of a combination of despair and necessity, not out of any sense of opportunity. Globalization meant adapting to a threat coming from the outside, not increasing their freedoms. I also realized that their previous ideologies-Arab nationalism, socialism, fascism or communism-while they may have made no economic sense, had a certain inspirational power.

But globalism totally lacks this. When you tell a traditional society it has to streamline, downsize and get with the Internet, it is a challenge that is devoid of any redemptive or inspirational force. And that is why, for all of globalization’s obvious power to elevate living standards, it is going to be a tough, tough sell to all those millions who still say a prayer before they ride the elevator.”Concluding StatementsGlobalization has the potential to bring both great benefit and great hardship to developing nations and third world populations. Like capitalism in the late 19th and early 20th centuries, globalization without proper checks and balances could become a runaway force, knowing no moral or ethical boundaries. But capitalism has been somewhat tamed by a system of checks and balances that have grown from a variety of sources, including labor unions, activists, legal restrictions such as anti-trust laws, and such organizations as the FDA and SEC.

While many people currently find globalization quite alarming due to its unregulated environment and the lack of restrictions on multi-national corporations, globalization carries within itself the very vehicle for its own regulation. Although formal international legal entities are still too weak to create lasting and enforceable legislation, the groundswell of public opinion is making itself felt. Internet use is putting activists in the developed world in direct contact with the developing world populations being most affected by globalization.

Greater access to international travel allows protesters to be on hand and heard during meetings such as those of the WTO taking place in Seattle. The
explosion of cable and online news services has made access to wide varieties of information easily available. Activists and protesters are able to reach investors, and investors are making their views heard through the buying and selling of stock.

Just as runaway capitalism seemed untamable in the infancy of the labor movement, globalization now seems too monolithic an entity to ever be harnessed. It is possible, however, that the social, political, and legal results of today’s anti-globalization activism may provide enough safety measures that globalization can become primarily an agent of progress for all people. Whether this will happen in time to save developing countries from being socially and culturally overwhelmed, it is too early to say.


Porter, Keith. “What is Globalization?” Globalization Issues. About.com. Nov. 2002 http://globalization.about.com/library/weekly/aa080601a.htm.

World Bank. Poverty in an Age of Globalization. Oct. 2000 http://www1.worldbank.org/economicpolicy/globalization/documents /povertyglobalization.pdf.

Alternet.com. Globalization Overview. Nov. 2002 http://www.alternet.org/issues/globalization.html.

Countries from A to Z. Grenada. The US Invasion of Grenada (2003).

http://www.atlapedia.com/online/countries/grenada.htmhttp://www.globalpolicy.org/empire/history/2003/10grenada.htmKarliner, Joshua. The Corporate Planet: Ecology and Politics in the Age of Globalization. 1997. Sierra Club Books.

Longworth, R.C. “Globalization Survey Reveals U.S. Corporations Prefer Dictatorships.” GlobalExchange.org. Nov 19, 1999. http://www.globalexchange.org/economy/econ101/survey.htmlInternational Monetary Fund. “Globalization: Threat or Opportunity?” Apr. 12, 2000. http://www.imf.org/external/np/exr/ib/2000/041200.htm.

Hutton, Will and Giddens, Anthony. (2000). Global Capitalism. The New York Press, New York2000.

Stiglitz, Joseph E. (2003). Globalization and Its Discontents. W.W, Norton & Company, Inc.,500 Fifth Avenue, New York, N.Y. ISBN 0-393-05124-2Friedman, Thomas L. (1999,2000). The Lexus and the Olive Tree. New York: Farrar, StrausGiroux ISBN 0-385-49934-5Postrel, Virginia. (August 15, 2002).”The Rich Get Rich and Poor Get Poorer. Right? Let’s TakeAnother Look.” New York Times

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