Globalization’s impact on developing countries
Globalization is not a very recent phenomenon. Rather, people have been familiar with this term from the last phase of the last century. The features of globalization have always been paving the way for better economic well-being through connectivity and free flow of information among the nations. Globalization is the integration of national economies into the emergent international division of labour.
The process of globalization is not equally beneficial for all the stakeholders. Developed or developing countries, both are being influenced differently by globalization. In general, globalization promotes growth. Usually, more globalized countries do experience better economic wellbeing. This process of being globalized reduces the role of government and increases interdependence among the states. On the contrary, countries with less economic capability fail to attain their expected benefit from these interdependences.
Existing literatures on globalization and its impact are mainly biased to the positive impacts of globalization. Even though, most of those who introduced the term 'Globalization' as mythical and controversial but supported its positive impacts as well. In the article, 'Globalization and Its Impact on the Third World Economy', writer Neelam Kumar Sharma, approached to determine the factors associated with this controversy and tries to analyse the economic impacts of globalization in the third world countries.
According to Neelam Kumar Sharma, Globalization is kind of necessary evil for developing countries. Because the features of Globalization have never been fully accustomed in the developing third world countries, but these are neither disdained. Globalization means the condition of unrestricted and which initiates easy movement of the factors of production, goods, services along with information and technologies. In this scenario, states become subject to the influence of multinational companies, and decreased state authorities' role, increased cross border interdependence. The whole process paves a way for attaining a common culture in every aspect in exchange for sacrificing the world's existing economic and political structure. In the changed economic structure, low-income countries go under the influence of MNC's of technologically advanced countries.
In another article titled 'Does globalization affect growth? Evidence from a new index of globalization' author Axel Dreher tries to formulate an index of globalization based on three major dimensions, those are economic integration, social integration, and political integration. To examine the impact of globalization on the growth of a country, the author used data for 123 countries of the time limit of 1970 to 2000. The empirical study found that economic growth is greatly related to the economic flows and restrictions. Growth takes place in the developing countries, but it is less robust since political integration does not affect.
Another article by author Mr Patrick Mutua Kioko, named 'A Study on The Impact of Globalization in Developing Countries: Focus on Africa from a Liberal Perspective' gives an overview of the term 'Third World Countries'. The author levelled those countries as third-world countries that are still in the process of development. Capitalist activities have been a strong part of the globalization process since it believes in the possibilities of progress. Juridical, equality, democracy and the free market are the four values also embraced by the globalization process according to the author.
Mr Shahid Yusuf, who is affiliated with World Bank, included some aspects of how Globalization impinges the development. He emphasized using trade to promote development at the same time warned on the verities of capital flows and their effects. He also explained the roles of migration as it can drawbacks for a developing country.
How do developing countries see globalization? In most of the developing countries, Globalization has a mixed experience. It is like a new reality for developing countries. Even though globalization has some negative impacts, still countries have to adjust their policies just to be accounted for the globalized world. Globalization creates a milieu of some types of insecurity due to the interaction with other state entities. Since Globalization produces uneven development, all the stakeholders do not get equally benefit from this process.
Now question rises, what are the effects of globalization on developing countries? How is Globalization sponsoring inequalities through trade and economies to the developing countries? Mainly the effects of globalization on developing countries are many. For instance wages and inequality, education, health status and longevity, and lastly spread of infectious diseases. Highly paid jobs are for people with more expertise and highly skilled workers. So, less-skilled workers will be overlooked.
On the contrary, due to economic integration, all the multinational companies will outsource their works for the cheaper labour cost which will ultimately make the job market open for all and any men can have those jobs. By this process, money can go through that poorer economy and people will have money so that would invest it for the education, even the government will be more enthusiastic in expensing for education. As an outcome of economic flow to the developing countries, people will have better health services, medical services, and life expectancy rises.
Globalization always promotes the idea of economic growth. Previously, most of the developing countries could not cope up with the high rate of tariff and trade barriers. Later, Globalization paved a way for decreasing the tariff and trade barriers. But this process was not equal. The developing countries could not ensure the same amount of economic growth as the developed countries. Many countries also were benefited from this, for example, India and China.
The rapid growth in these two countries even caused a global decrease in the poverty rate. But the notion of inequality prevails when the developed or strong country's MNC's extract the resources (such as raw materials, oil, natural gas, hydrocarbons, etc) of the developing countries. And later these developing countries are in the situation of buying finished goods made from raw materials/resources of their own country. Technological advancement is the leverage for the developed countries. Thus, they promote inequality through globalization in terms of trade and economies.
Many analysts believe that by making markets more effective, increasing competition, limiting armed tensions, and distributing resources more equally around the world globalization gives a net profit to individual economies globally. The developing countries particularly cannot attain the benefit from this process of being globalized, rather the developed countries have the benefit of globalization, since they are technologically advanced and decorated with production know-how.
The writer is a BSS in International Relations & MSS in Development Studies, Bangladesh University of Professionals