How Globalization Affects Developing Countries Essay Example

How Globalization Affects Developing Countries? Essay How The phenomenon of globalization began in a primitive form when humans first settled into different areas of the world; however, it has shown a rather steady and rapid progress in the recent times and has become an international dynamic which, due to technological advancements, has increased in speed and scale, so that countries in all five continents have been affected and engaged. What Is Globalization? Globalization is defined as a process which, based on international strategies, aims to expand business operations on a worldwide level and was precipitated by the facilitation of global communications due to technological advancements, and socioeconomic, political and environmental developments. The goal of globalization is to provide organizations a superior competitive position with lower operating costs, to gain greater numbers of products, services and consumers. This approach to competition is gained via diversification of resources, the creation and development of new investment opportunities by opening up additional markets, and accessing new raw materials and resources. Diversification of resources is a business strategy that increases the variety of business products and services within various organizations. Diversification strengthens institutions by lowering organizational risk factors, spreading interests in different areas, taking advantage of market opportunities  and acquiring companies both horizontal and vertical in nature. We will write a custom essay sample on How Globalization Affects Developing Countries? specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on How Globalization Affects Developing Countries? specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on How Globalization Affects Developing Countries? specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Industrialized or developed nations are specific countries with a high level of economic development and meet certain socioeconomic criteria based on economic theory such as gross domestic product (GDP), industrialization and human development index (HDI) as defined by the International Monetary Fund (IMF), the United Nations (UN) and the World Trade Organization (WTO). Using these definitions, some industrialized countries in 2010 were: Austria, United Kingdom, Belgium, Denmark, Finland, France, Germany, Japan, Luxembourg, Norway, Sweden, Switzerland, and the United States. (The WTO sets the global rules of trade. But what exactly does it do and why do so many oppose it? Read What Is The World Trade Organization? ) Components of Globalization The components of globalization include GDP, industrialization and the Human Development Index (HDI). The GDP is the market value of all finished goods and services produced within a countrys borders in a year and serves as a measure of a countrys overall economic output. Industrialization is a process which, driven by technological innovation, effectuates social change and economic development by transforming a country into a modernized industrial, or developed, nation. The Human Development Index comprises three components. Specifically, a countrys (a) populations life expectancy, (b) knowledge and education measured by the adult literacy and (c) income. The degree to which an organization is globalized and diversified has bearing on the strategies that it uses to pursue greater development and investment opportunities. The Economic Impact on Developed Nations Globalization compels businesses to adapt to different strategies based on new ideological trends that try to balance rights and interests of both the individual and the community as a whole. This change enables businesses to compete worldwide and also signifies a dramatic change for business leaders, labor and management by legitimately accepting the participation of workers and government in developing and implementing company policies and strategies. Risk reduction via diversification can be accomplished through company involvement with international financial institutions and partnering with both local and multinational businesses. (Investing overseas begins with a determination of the risk of the countrys investment climate, read Evaluating Country Risk For International Investing. Globalization brings reorganization at the international, national and sub-national levels. Specifically, it brings the reorganization of production, international trade and the integration of financial markets, thus affecting capitalist economic and social relations via multilateralism and microeconomic phenomena, such as business competitiveness, at the global level. The transformation o f the production systems affects the class structure, the labor process, the application of technology and the structure and organization of capital. Globalization is now seen as marginalizing the less educated and low-skilled workers. Business expansion will no longer automatically imply increased employment. Additionally, it can cause high remuneration of capital due to its higher mobility compared to labor. The phenomenon seems to be driven by three major forces: globalization of all product and financial markets, technology and deregulation. Globalization of product and financial markets refers to an increased economic integration in specialization and economies of scale, which will result in greater trade in financial services through both capital flows and cross-border entry activity. The technology factor, specifically telecommunication and information availability, have facilitated remote delivery and provided new access and distribution channels while revamping industrial structures for financial services by allowing entry of non-bank entities such as telecoms and utilities. Deregulation pertains to the liberalization of capital account and financial services in products, markets and geographic locations. It integrated banks by offering a broad array of services, allowed entry of new providers and increased multinational presence in many markets and more cross-border activities. In a global economy, power is the ability of a company to command both tangible and intangible assets that create customer loyalty, regardless of location. Independent of size or geographic location, a company can meet global standards and tap into global networks, thrive and act as a world class thinker, maker and trader, by using its greatest assets: its concepts, competence and connections. Beneficial Effects Some economists have a positive outlook regarding the net effects of globalization on economic growth. These effects have been analyzed over the years by several studies attempting to measure the impact of globalization on various nations economies using variables such as trade, capital flows and their openness, GDP per capita, foreign direct investment (FDI) and more. These studies examined the effects of several components of globalization on growth using time series cross sectional data on trade, FDI and portfolio investment. Although they provide an analysis of individual components of globalization on economic growth, some of the results are inconclusive or even contradictory. However, overall, the findings of those studies seem to be supportive of the economists positive position instead of the one held by the public and non-economist view. Trade among nations via the use of comparative advantage promotes growth, which is attributed to a strong correlation between the openness to trade flows and the affect on economic growth and economic performance. Additionally there is a strong positive relation between capital flows and their impact on economic growth. Foreign Direct Investments impact on economic growth has had a positive growth effect in wealthy countries and an increase in trade and FDI resulted in higher growth rates. Empirical research examining the effects of several components of globalization on growth using time series and cross sectional data on trade, FDI and portfolio investment found that a country tends to have a lower degree of globalization if it generates higher revenues from trade taxes. Further evidence indicates that there is a positive growth-effect in countries which are sufficiently rich as are most of the developed nations. The World Bank reports that integration with global capital markets can lead to disastrous effects without sound domestic financial systems in place. Furthermore globalized countries have lower increases in government outlays, as well as taxes, and lower levels of corruption in their governments. One of the potential benefits of globalization is to provide opportunities for reducing macroeconomic volatility on output and consumption via diversification of risk. Harmful Effects Non-economists and the wide public expect the costs associated with globalization to outweigh the benefits, especially in the short-run. Less wealthy countries from those among the industrialized nations may not have the same highly-accentuated beneficial effect from globalization as more wealthy countries measured by GDP per capita etc. Free trade, although increases opportunities for international trade, it also increases the risk of failure for smaller companies that cannot compete globally. Additionally it may drive up production and labor costs including higher wages for more skilled workforce. Domestic industries in some countries may be endangered due to comparative or absolute advantage of other countries in specific industries. Another possible danger and harmful effect is the overuse and abuse of natural resources to meet the new higher demand in the production of goods. (Learn what both the supporters and critics have to say about this growing global trend The Globalization Debate. The Bottom Line One of the major potential benefits of globalization is to provide opportunities for reducing macroeconomic volatility on output and consumption via diversification of risk. The overall evidence of the globalization effect on macroeconomic volatility of output indicates that, although in theoretical models the direct effects are ambiguous, financial integration helps in a nations production base diversification, leads to an increase in specialization of production. However, the specialization of production based on the concept of comparative advantage can also lead to higher volatility in specific industries within an economy and society of a nation. As time passes, successful companies, independent of size, will be the ones that are part of the global economy. (Read Does International Investing Really Offer Diversification? )

The Causes And Effects Of World War Essays - Causes Of World War I

The Causes And Effects Of World War Essays - Causes Of World War I The Causes and Effects of World War What were the causes and effects of World War I? The answer to this seemingly simple question is not elementary. There was more to the onset of the war then the event of an Austrian prince being murdered in Serbia, as is what most people consider to be the cause of World War I. Furthermore, the effects of the war were not just concentrated to a post-war era lasting for a generation of Westerners. No, the effects of the war were widespread throughout the world and can be traced to generations after the war. It is not a rare occasion that when a person is asked what the causes of World War I were, that they answer with the simple comment of an Austrian Prince being shot in Serbia. However the assignation of the Archduke Francis Ferdinand and his wife, Sophie , in Sarajevo was not the main cause of the Great War. Rather, it was the breaking point for Austria in its dealings with Serbia. The truth of the matter is that several factors played a role in the outbreak of the catastrophic war the engulfed the nations of Europe for over four years. World War I truly was the result of building aggressions among the countries of Europe which was backed by the rise of nationalism. To add to the disastrous pot, there was also imperial competition along with the fear of war prompting military alliances and an arms race. All of these increased the escalating tensions that lead to the outbreak of a world war. (Mckay, pg. 904) Two opposing alliances developed by the Bismarckian diplomacy after the Franco- Prussian War was one of the major causes of the war. In order to diplomatically isolate France, Bismarck formed the Three Emperor?s League in 1872, which was an alliance between Germany, Russia, and Austria-Hungary. Then in 1882 , Bismarck took advantage of Italian resentment toward France and formed the Triple Alliance between Germany, Italy and Austria-Hungry. In 1890 Bismarck was dismissed from his office and France took the opportunity to gain an ally, therefore , in 1891 the Franco- Russian Entente was formed. Then in 1904 Britain and France put aside their conflicts and formed the Entente Cordiale. As a result , the Triple Entente , a coalition between Great Britain, France , and Russia, countered the Triple Alliance. Now Europe was divided up into two armed camps.(World Book Encyclopedia, WXYZ, pg. 367) Nationalism also played a major role in developing tensions in Europe; for it had been causing dissatisfaction since the Congress of Vienna in 1815. In that settlement the preservment of peace was chosen over nationalism, therefore, Germany and Italy were left as divided states, though they did unify in the future. The Franco- Prussian War in 1871 resulted in the France?s loss of the province of Alasce- Lorraine to Germany, and the French looked forward to regaining their lands. Then there was Austria- Hungary which controlled many lands that their neighbors felt belonged to them. Serbia wanted Bosnia and Hercegovina, Italy wanted the Trentino and Trieste regions, and the Czechs and Solvaks wanted independence from Austria- Hungrey. There was also Russia which had problems within it?s own boundaries; for Russia contained many different nationalities and many were also seeking independence in the name of nationalism. ( World Book Encyclopedia, WXYZ, pg. 366) Another major conflict that caused the outbreak of the Great War was what is known as the arms race. With the hostile divisions of the nations of Europe there came the expansion of armies and navies. Furthermore, the great powers came to copy Germany?s military organization and efficiency, which called for universal registration for military duty, large reserves and detailed planning. Efforts were made for universal disarmament, but the " international rivalry caused the arms race to continue to feed on itself. " (Karpilovsky, World Wide Web) Imperial competition also played a major rule in the act of increasing the ever growing tensions among the divided countries of Europe. In Africa there were two crises in Morocco. The first time, in 1905, Germany full heartedly supported Morocco?s call for independence from France, and with the British defending

Illegal immigration and its impact on the economy Essay

Illegal immigration and its impact on the economy - Essay Example It has become a matter of debate and study as it relates considerably to the nation’s politics as well as economy. At the centre of this debate is the question of whether illegal immigrants are good or bad to the economy of the United States (Dudley 18). Various studies have shown that a great number of the United States’ citizens hold the opinion that illegal immigrants are bad for the nation’s economy. However, there are those who believe that these illegal immigrants are good for the economy. Several surveys show that there is a consensus among many economists that both legal as well as illegal immigration is good for the economy seeing that it provides cheap labor; it gives net boost to the economy; it reduces the cost of goods and services; in addition to widening the market for goods and services (Kenney 23). This paper will discuss illegal immigration and its impact on the economy. There has been divided public opinion regarding the impact of illegal immig rants on the United States economy. There are those who believe that illegal immigrants are good for the economy and there are those who believe that they are bad for the economy. ... refore be deduced that the debate on the impact of illegal immigrants revolves around the way in which they expand the national economy and how they, on the other hand, cost the government and increase public expenditures (Dudley 20). In general, illegal immigrants are defined as all individuals who are foreign-born and are non-American citizens and who are not the legal residents of the nation. Illegal immigrants are those individuals who are either admitted temporarily into the country and stay beyond the required duration or those who enter without inspection (West 427). As earlier mentioned, illegal immigration has been a matter of debate and study for a long time across the world and especially in the United States, which records the highest number of illegal immigrants. This subject has attracted a lot of attention because of the great impacts it has on the economy, politics, as well as the social aspects of any given society (Dudley 25). Illegal immigration has had considerabl e impacts on the economy of the United States. Throughout the history of the United States, illegal workers have played a very crucial role in the economy. While economists agree that there are many economic benefits associated with illegal immigration, they also agree that illegal immigration has many burdens to the economy (Nadadur 1037). This has caused division among policy makers on whether illegal immigration laws should be enforced and illegal immigrants punished or whether illegal immigrants should be given amnesty. Numerous studies on the impact of illegal immigration on the economy have found out that there are evident benefits of illegal immigration on the economy. One of the reasons attributed to this proposition is that illegal immigration supplies labor to industries at a