Introduction
This paper discusses the effects of globalization in regards to economic, social, and environmental realms. It also looks critically at the shift of ownership of organizations from the public sector to the private sector. In addition, it discusses the benefits and disadvantages of privatization of institutions in detail.
To begin with, globalization refers to the integration of economies through its institutions into a single entity that can achieve the goal of fighting poverty in the weaker economies. Although there are many benefits of globalization of industries, there is also a negative impact on the economic, social, and environmental spheres.
On the other hand, privatization of institutions refers to the change of ownership of organizations from the government to the private sector. In fact, privatization has its own implications and externalities, which shall form the basis of this paper’s discussion.
Economic effects of globalization
Globalization and privatization of industries has both positive and negative effects on economies. One of the positive effects to globalise is the increased living standards. This is because with increased integration of governments, the developing countries get the chance to develop through international lending, and assistance.
With the availability of funds, it is possible to have social services to the people, health care services, education, and all the essential services provided to the people at the local level. Secondly, the developing nations have the access of new markets, which were not available to the people before. The access of the free markets helps companies to trade with companies in the international market (Baldwin & Robert 123).
International trade also helps to curb the widening gap between the poor and the rich. Due to increased access of markets over a long period, it is possible to have a rise in education levels and increased salaries. There will also be sustainable development, which is associated with elevation, and the rise of standards of living.
Although the change in the standards of living will not affect/benefit everyone, it will be possible for the poor nations to become richer. Due to creation of new jobs, it will be possible to have an increase in the wealth and incomes of the people in terms of wealth creation (Taylor 76).
On the negative side, globalization leads to decreased employment levels. Skilled workers will be able to get new jobs thus having improvements in standards of living. Conversely, the presence of new technologies lessens unskilled labor. This is because manufacturing companies can use the former in petty manufacturing jobs. Therefore, social services become less, leading to lack of jobs for the people who do not have skilled form of labor.
Globalization has effects on the economies due to the destruction of the macroeconomic policies that form the economic plans of many countries. The effect of financial integration on the growth of nations is massive. Empirical evidence shows that the relationship caused by the integration of industries can lead to growth and economic stability of the weak economies in the integration.
On the other hand, little evidence shows that globalization does not help to stabilize economic fluctuations. Consumption vitality increases in the case of increased financial integration of the global economies. This means that the developing countries will help to increase their consumption rates at the expense of the global economies, which will have risen at a high rate (Bouvier 177).
Globalization on the other hand leads to a change of the existing policies into policies, which enhance corruption and embezzlement of funds. Although there are new improvements in technology, it is impossible to have industries controlled by a single entity. In fact, the dynamics of corporate governance are very complex.
This will reduce the levels of transparency leading to increased scandals and enrichment of the few at the expense of many people within the society. Financial integration will not only leave some countries poor, but it will enrich those countries where the main industries are located.
The developing economies face various risks in their businesses if they do not have policies and good governance. Lack of transparency and bad governance of businesses destroys the economic performance, thus hindering the development of these economies. Corruption also affects capital inflows, especially when the latter is coming from international bodies that formulate new policies and structures.
When there are inflows in the capital and the expenditure in these countries, it becomes difficult for the economies to perform as per expected rates. Inflationary rates and weakening of the currencies also continue to happen at the expense of the local people. Macroeconomic volatility also increases tremendously, and therefore, it worsens the economies of the developing countries (Cline 165).
As much as globalization has negative effects, its benefits outweigh the disadvantages. This is because it will help to decrease a capital market that controls regional trade in the capital markets. Capital markets have control over taxes, but the restriction of regional tariffs serves to equalize the control of taxes by capital markets.
Synchronization of asset laws also prevents any form of restriction in the economic welfare. This leads to a tremendous reduction in the cost of transportation, leading to formation of free trade zones. This helps to boost the developing nations, and boosting of their economic structures.
Environmental effects of globalization
The change in global trade has raised long-range impacts on the ecology of the earth. Since the past, globalization has brought up controversial debates on the environment. Many issues have been the subjects of debate and criticism, and they range from the decay of the environment to the effects of trade and globalization.
In fact, many scientists suggest that the increased rate of globalization of economies may later lead to the collapse of the environment. There are three environmental concerns related to globalization, and they include domestic effects of the byproducts imported from other countries, effects of the environment because of movements and foreign effects of the environment because of products of goods for export (Leung 78).
Increased transportation of products from one geographical region to the other poses a great threat to the environment. International transportation causes the decay of the environment because of pollution. Consequently, globalized foods and beverages are the main causes of international transportation.
Small-scale farming is increasingly reducing because the global industries are taking over farming and the business that is concerned with agriculture in particular. That is why consumption has changed dramatically with local people buying food from overseas processing companies, and neglecting the food by the local farmers. This continues to encourage the international trade at the expense of the ecology (Bouvier 177).
International transportation not only causes pollution but also it is a contributor of landscape intrusion, high levels of fatality and destruction of the roads. This also affects the globe through the destruction of the ozone layer due to the effects that greenhouse gases pose.
Although there are benefits of globalization, one thing is for sure and that is, this form of international trade has resulted to the deflation of the environment through wastage of the natural resources. Environmentalists have also argued that the globalization of industries and businesses has also caused the degradation of the environment. Global industries have also contributed to deforestation of poor countries to set up industries, and this has led to an increase in the poverty levels of these poor countries (Baldwin & Robert 126).
There are many global issues, which come up because of globalization of industries today, and they include climate change because of increased pollution.
Due to lack of good policies, which are made in such a way that they prevent globalization, increased industrialization in the developed countries has led to increased output of greenhouse gases leading to destruction of the climatic patterns around the globe. Due to the dwindling resources, the global industries have polluted the environment in many ways. Scientists even suspect that by the year 2030, greenhouse gases may completely deplete the ozone layer.
In order to coordinate international issues concerning the environment, it is important to create an international body, which will ensure that there is a solution to the effects of the environment. With the formation of the international body, it will be easier to have sovereignty over other bodies.
This will help in the protection of the environment. There should also be regulated economic activities that will help to protect the environment in terms of global warming and regulation of pollution levels. Environmental degradation has also been identified as the main cause of poverty in the developing countries, and thus the environment should be protected to ensure that there is sustainable development associated with protection of the environment (Mayor 344).
Social effects of globalization
There are many social effects of globalization, which include the social change, the development of ethnic-based conflicts, and the development of social movements as well as trade and usage of illicit drugs. Since the 19th century, there has been increased trade of goods ranging from transnational trade to unification of economies.
However, globalization has led to destruction of policies. This increased social integration of the societies into a single platform. In fact, in the developing economies, which are the ones these policies affect the most, there has been increased ethnicity due to destruction of laws that encourage social unification (Taylor 74).
Globalization has both social and political issues, which range from regional concerns to international concerns. For instance, power has shifted from the developing nations to their foreign counterparts who are actively involved in giving them credit and investments to stimulate their growth. This unification has also undermined social goals and alliances which have been in the world since the very past (Mayer).
Due to the increased unification of industries, it is impossible for the poor people to become richer and this contributes to social and regional conflicts in these developing countries. Due the increasing social crises, the developing nations have had their power taken up by their developed counterparts. The latter have affected political and social stability in the former countries. The effect of this has been an increase in the levels of enmity in these countries (Leung 80).
Globalization has also destroyed social structures created by democracy in developing countries over the years. This is because globalization is against the implementation of democratic policies. The non-governmental organizations have also decreased tremendously. In fact, the NGOs have since the past fought for democratic processes, human rights and helped to fight poverty in the developing nations.
Conversely, there have been increased changes in the institutions thus having a shift of power from these organizations to international corporations such as the World Bank and United Nations, which have the most critical role in the governance of the world. Global governance has shifted to these international corporations, which enhance decision making to suit their economic ambitions thus destroying the past global relations (Collier & David 88).
Globalization has also affected social constructs such as gender and femininity all over the world (Mayer). Similar to the other social constructs destroyed through the unification and integration of industries, globalization has also affected the social order, which has been in existence since the past.
Globalization has had a negative effect on local communities, which had urban structures, because an increase in globalization leads to movement to urban areas and urbanization of remote settlements. Due to destruction of institutions such as the NGOs, it is now difficult to promote social construction within the urban centers. Organizations fighting for women rights have no power because regional structures have stripped them of their powers.
Globalization has also increasingly destroyed structures and social institutions. Globalization and increased international trade have combined to destroy pre-existent systems that controlled societies like the age caste systems. The postmodern revolutions have been destroying the human relations leading to the predominance of the society, which has increased hatred within them.
In fact, there are hardly any links in the contemporary society that can help humans to interact as a single entity. This is because of the poor relations that have come up because of the effects of globalization. Instead of helping the societies to interact as a single entity, the new institutions created by man are destroying the relations of humans on the planet (Collier & David 97).
Globalization has also social concerns, which range from human relations to working conditions which are very poor and which do not help human relations within the society. Many people are also concerned about income-related matters. Many have wondered whether the global industries are able to protect the workers on a social basis. Globalization has also destroyed social dimensions such as cultural identities.
This is because the global companies are coming up with the western culture from the developed nations, which erode the existing culture in the local level. It is arguable that globalization has broken many families and ruined lives. In the past, people used to live as extended families but today people are living as single families in the urban centers. This has contributed to the decay and destruction of the families as single entities. It has also led to the increased spread of HIV and other communicable diseases (Mayor 345).
Globalized industries, which are a result of globalization, have destroyed social welfare schemes. Globalization has also led to the erosion of cultural values due to the increased globalization of companies. There is an increase in violations of human rights due to globalization.
This is because globalization has led to destruction of the social values. Global social policy has also changed from the cooperation’s based on shaping the social values within the society (Fabian). Particularly, organizations based on the integration of societies have transformed to international corporations. That is why neo-liberal globalization is all about changing the social perspectives into business entities, which are beneficial in the society.
The pros and cons of privatization
Just like globalization, privatization of industries and firms has both negative and positive effects to the developed economies such as China and Brazil. Privatization ensures that there is a shift of ownership of firms from the government entities to the private bodies. Privatization has helped in the development of economies through transition of governance to the private sector.
Studies show that the transition of ownership helps to increase the distribution of the sales, increase of the employment level, capital increase among people and small enterprises. Legal liability increases when governments come up with policies to transfer their institutions to private owners. Additionally, competition within the business entities increases tremendously upon the transfer of ownership of these entities to the local people (Davis 66).
China has privatized its stock company, and other countries have privatized some of their firms. This has led to an increase in business fluency in the local level. The country has also increased its state shares, and this has led to the change of the commerce in China. The people who have ownership in the privatized companies have benefited from the shareholding. In fact, governance has also been increased and thus transparency.
This helps to reduce competition among individual business people and firms. However, it is difficult to achieve the social goals of the people without government control. Implementation of legislatures and policies that control business is also a hard task with privatization. Opponents of privatization also argue that essential to cut services if companies have been privatized (Davis 57).
Conclusion
In summation, although there are many positive economic impacts of globalization, there are also negative effects of globalization. For instance, globalization affects the developing economies in such a way that they are no longer productive. Employment levels and poverty levels increase because the countries use current technologies to run their economies.
Secondly, globalization has negative effects on the environment as it affects global ecologies. In fact, increased industrialization not only affects national climate conditions but also has increased effects on the globe. Globalization has caused climate change and the destruction of the ozone layer.
Globalization has also affected the social structures in many societies. Due to destruction of democracies and the social organizations which helped to improve integration of the people, today the relationships of the people have been consequently been destroyed. This change has contributed to increased ethnicity, destruction of social structures, destruction of social movements and increased trade of drugs due to lack of enough barriers to prevent the trade of the drugs.
On the other hand, globalization has also affected the social structures and political powers. For example, the developed countries have the habit of controlling their developing counterparts because they provide them with development credit and assistance.
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