There are certain facts of life and globalization is one of them. But with completely integrated social, economic and structural systems comes both a profit and a price. The phenomenon has occurred in three waves across modern human history: beginning around 1870 and ending at the start of World War I, reviving in 1950 due to multiple trade agreements and ending in 1980, and finally establishing permanently at the fall of the Berlin wall in 1989. But as the flow of goods, services, currency, technology, legislation and human capital increase across national boundaries, there have been a number of costs (both apparent and latent) that a variety of stakeholders have had to bare.
Developing countries have taken a blunt of the burdens. During the second wave, the world began to socioeconomically divide more concretely between countries that established trade agreements and those that were excluded due to cultural differences (the current “developing nations”). An influx of foreign investment is creating peaks and troughs in the local demographics caused by patronage of few and exploitation of many. Also, there are some who equate globalization to westernization. Many local traditions pertaining to medicine, language, art, and religion have eroded; cultural homogenization is creating a uniform world devoid of individualistic caricatures for future generations.
However, globalization has the potential to increase the standard of living and market outreach in these developing countries. Foreign lending is now available to these developing countries as their influence in the world economy rises. These states can now invest in their future: strengthening infrastructure, improving educational institutions, offering more social services, and organizing a robust healthcare system. In turn, global competition will increase for not only employment, but also the goods and services offered. Competition will also maintain steady prices, decreasing the possibility that inflation could unsettle economic growth. With the marginal getting a chance to exhibit in the world market, an open economy will emerge. Thus, innovation will be revitalized.
The multinational retail organization, WalMart, got approval from India’s lower house of Parliament to set up shop. But determining the cultural nuances of Indian consumers should be a challenge for WalMart. More and more companies are looking to do business in India, a rising economic and political powerhouse.
Indeed, globalization is a double-edged sword. And both foreign investors and developing countries must be wary of the deals being made. The increased trade and open economy has its pitfalls that are not always observable immediately. Do you think a perfect balance between economic equality and prosperity with globalization?