Trade relations and economic condition in its micro sense has been influenced by the so-called globalization. The economic condition of a state particularly the first world countries have in one way or another a determining factor on the status of other countries particularly those which rely on it. Volumes of sales for instance, importations, exportations grow bigger and there is greater access to international market through globalization. Moreover, state laws or statutes are influenced by world economic condition.
These are outcomes of globalization. But what really is globalization, its aspects, impact and significance, remain a query to many. This paper deals in globalization, defines and treats of its nature. Further, this talks about the impact, implications and significance of the same as a growing concern to developed, developing and under developed countries.
Literally, globalization is the act of transforming local occurrences or regional phenomenon into of global application. These local occurrences may pertain to economic, scientific, technological, political, or sociocultural factors, introduced into the global sphere (http://en.wikipedia.org/wiki/Globalization, 2008) including revolution of the media, and migration (Hefti, http://www.philsol.nl/solcon/Anny-Misa.htm).
For instance, China, an Asian country, has not only sold and traded its products to its local consumers. It has made access to the international market by trading in and exporting its products even in the United States, Australia and more especially in the Asian Region. In this regard, its local products are made available globally; thereby its products partake of the nature of the international market. But the pioneer of it all is the United States. Products of the latter have popularly known world wide and even made accessible through the advent of scientific developments on internet or web access.
More often than not, globalization is associated with the ‘international economy’ in the form of capital flow, foreign investments, trade, migration and the introduction and development of technology (http://en.wikipedia.org/wiki/Globalization, 2008).
Quiet differently, but for the same sense, Palmer has defined globalization as the reduction or elimination of the restrictions imposed by the state on matters affecting trade relations and dealings in the international sphere (http://en.wikipedia.org/wiki/Globalization, 2008).
Thus, laws and statutes enacted may already partake of such matters benefitting the international market for example. Moreover, statutes may provide for the protection of foreign importers and their form of direct investments into the local market. Likewise, foreign direct investors may be given access to courts in order to enforce their rights and further protect their interest in global dealings.
The global sphere tends to shrink allowing businessmen and traders from all walks of life, regardless of their country of origin to deal with each other with the least, if not total absence of restrictions in the conduct of their business. The global market thus opens the market to all trade dealers, and in the same way, allows them to put up their investments and interest in the businesses of foreign traders, with the guaranteed protection of their individual interest through the enforced state laws and statutes.
While the term globalization is often interchangeably used with the term internationalization, there is a quiet difference between the two. The latter pertains to relations between and among nations on matters involving trade in the international market, treaties and relations (http://en.wikipedia.org/wiki/Globalization, 2008).
Globalization, its present condition has been the product of serious deliberations between and among economists, businessmen or politicians all over the world, all looking forward for the benefit of their individual countries and the protection of the same. Towards this end, there established such international organizations where they can each venture out proposals and enforce certain remedies, and control the conduct of international dealings. These organizations include the creation of the World Bank, International Monetary Fund and the World Trade Organization. These are intended towards the promotion of free trade (http://en.wikipedia.org/wiki/Globalization, 2008).
Globalization, as an international or global phenomenon, may be characterized by the practice of laissez-faire economy or neo-liberalization. That is, liberalization of trade practices and rules have been observed to allow a much easier access towards the barter and sale of goods and services not only within the local market but in the global market as well. Using the terms of Palmer, it is characterized by the internalization of good production, labor and migration (http://globalization.icaap.org/content/special/pinder.html, 2008).
In this regard, statutes affecting the economic stability and condition of the country allow a greater access for direct foreign investors to trade in their countries, provide greater benefits and incentives, and may sometimes grant tax incentives or tax holidays.
Moreover, political deliberations are geared towards the adoption of measures on trade liberalization. They encourage the broadening of the trade and industry and promote the production of goods and services that would cater to the needs of foreign consumers and even engage research and development for business expansion.
More particularly, this may be characterized by the rise of capitalism where private ownership of businesses has increased.
Furthermore, more businesses are allowed operation to service foreign consumers and meet the demand of the global market.
Effects/Impact of Globalization
Globalization, by its nature, has vast effects on all countries particularly those which entered into treaty agreements and stipulations affecting economic trade. These effects may be difficult to identify and quantify, however, it is but proper to enumerate a few of these to be able to appreciate the vastness and benefits it may bring into.
By globalization, the consuming populace constantly increases, and so the demand for the production of a particular product is increased. Demand for raw materials, local and abroad, is thereby increased and consequently, the increase in trade relations speeds up (http://en.wikipedia.org/wiki/Globalization, 2008).
Where a product, one manufactured by the United States for example, gains access through the international market, say Asia, there are more consumers to which it would cater and thus the demand for more production. Likewise, the need for more research and development for the purpose of a certain product is heightened due to the increase in demand for a better service or better quality product, considering that needs and wants of people from all walks of life vary geographically.
This actually creates a cycle. Producers and manufacturers are able to generate more income from the sale of goods and so ventures out for more production or the generation of new products available both in the local market and the international market.
Migration is a net effect of production. Where production increases, the need for a bigger labor force consequently increases, thus the need for more people to work in the production line (http://en.wikipedia.org/wiki/Globalization, 2008). The demand for an increased labor force encourages migrant workers, particularly from second world countries and beyond with the expectation of higher earnings compared to that received locally, and further encourages migration in foreign countries.
In the point of view of the migrant workers vis a vis countries of origin, income of individual households is increased. Reported income to families reported grow large and corollarily increase the standard of living, and thus encourage labor migration (http://www.philsol.nl/solcon/Anny-Misa.htm, 2008).
It has been viewed that what causes people to move around or even transfer residence for economic and social factors (http://www.philsol.nl/solcon/Anny-Misa.htm, 2008). Offers for better work or better compensation serve as invitation for moving around, and at times, leaving families behind.
Studies have shown that the United States had been in constant demand for workers in the manufacture of goods and commodities. These days however, this has been replaced by China which also competes with the former in the exportation of goods not only within Asia but globally, thus, have been constantly increasing its workforce (http://globalization.icaap.org/content/special/AqueilAhmad.html, 2008).
While social factors had been a reason for moving around, this is not so today. By globalization, advancement in technology, means of communication have been developed, transfer of information have been improved allowing constant linkages between and among nations (http://www.philsol.nl/solcon/Anny-Misa.htm, 2008).
As has been said, increase in the demand for production likewise heightens the need for more research and development. Technological advancement can be said to have an incident and likewise the output as a response of these increasing needs (http://www.philsol.nl/solcon/Anny-Misa.htm, 2008).
In relation to migration for instance, rapid growth of migration rate paves the way to a rapid increase and development of communication gadgets. Web access has improved, becoming less expensive than the traditional snail mails or oversees calls.
standard of living
Increase in the production line consequently increases employment rate. Higher income is thus brought to individual households, and a higher capacity for a more luxurious way of living. In the same vain, demand for articles for luxury and pleasure is enhanced thus the need for more production in this line – a vicious cycle, that is!
With the foregoing, globalization has affected various industries such as but not limited to the following:
With the gates opened for globalization, industrial trade markets are organized and maintained. There established a wide range of foreign commodities and products in the international market; thereby creating a movement of raw materials and commodities across national boundaries (http://en.wikipedia.org/wiki/Globalization, 2008).
The World Bank has been the popular global provider for financial assistance for large companies and businesses and even governments. Moreover, international financial institutions are now accepting international borrowings made in the course of trade relations, subject though to certain conditions as may be agreed by the parties (http://en.wikipedia.org/wiki/Globalization, 2008).
There can be no doubt that the speeding up of globalization as an international concern has improved the economic conditions of different nations through the increase in foreign earnings and availability of foreign sources for financial assistance (http://en.wikipedia.org/wiki/Globalization, 2008). This does not foreclose though the negative implications on some poorer countries which could not compete with foreign products, thus, putting the local market at a great loss.
Foreign trade dealings improves international political relations among nations. There is then created a wider venue for international dealings towards the regulation of international trade relations and while strengthening local economy and protecting local investors and businessmen. In this regard, there has been created international organizations such as the WTO, World Bank and IMF keeping the obligation of facilitating and regulating relationships between and among governments (http://en.wikipedia.org/wiki/Globalization, 2008). Worthy of mention is the participation and influence of the United States government, although nowadays, the rise of China’s economy is also notable.
International trade dealings require a more advanced modes of communications among governments and foreign investors, thus the rise of convenient devices for communication at the least possible cost. Technological advancements brought to foreign countries such needed information necessary for the perpetration of trade relations quickly (http://en.wikipedia.org/wiki/Globalization, 2008).
Language is sometimes treated a barrier for an effective communication. International trade relations and the rise for migration rates, countries which are second language learners develop suitable means for better learning, particularly the English language, being the international language (http://en.wikipedia.org/wiki/Globalization, 2008).
globalization is a healthy approach for increased production rate and eventually for income and also for capital. While this is true for large scale businesses capable of competing globally, small scale businesses are prejudiced thereby. Moreover, poorer countries which are incapable of meeting international standards lives a poor economy and shall remain there as such giving way to first world countries to dominate in the international market and perpetrating into the local market. In this sense, globalization serves as a threat to the local economy (http://en.wikipedia.org/wiki/Globalization, 2008).
Continuous trade dealings heighten awareness of socio-cultural activities of foreign countries. This opens adaption of some foreign socio-cultural practices found practical and beneficial for the local community. This works in the same way that foreign products and raw materials are imported into the local market (http://en.wikipedia.org/wiki/Globalization, 2008).
Business dealings are always coupled with business conflict among parties. The creation of the International Criminal Court is a response to these to foster trade relations and the protection of individual interests among nations (http://en.wikipedia.org/wiki/Globalization, 2008).
Globalization is an increased international dealing and always relates to economic and trade relations. In effect, it opens opportunities for political, economic and social relations among nations creating an impact on individual households, and the formation of international organizations.
Admittedly, it works for the benefit of first world countries and large scale businesses. It generates increased demand for production, an avenue for greater sales and investments and the like. However, while it works to improve them, it works otherwise on poorer nations or small scale businesses.
In fact, globalization is treated as a threat on the local economy. As has been opined by anti-globalization movements, it said to cause the ‘breakdown of democracy’ considering that local trade has to work hand in hand with the international market and international relations despite the inability of the local market to meet the needs of the global market. Products of local manufacturers are placed at a disadvantaged as compared to that of foreign manufacturers and producers in terms of quality, quantity and prices; thereby leading to the decline of local products. To allow access of foreign goods and services to the local market works the reduction of local goods and services and the decline of local economy, agriculture and business in general. While foreign countries are allowed access on local economy, it does not bring with it only its products but the totality of what it has, that is, it carries with it the influence on the local community by the social, scientific, technological, moral aspects of such foreign nation (http://en.wikipedia.org/wiki/Globalization, 2008).
No Author. (2008). http://en.wikipedia.org/wiki/Globalization.
No Author. (2008). http://www.philsol.nl/solcon/Anny-Misa.htm.
No Author. (2008). http://globalization.icaap.org/content/special/pinder.html.
No Author. (2008). http://globalization.icaap.org/content/special/AqueilAhmad.html.