Background
Globalization is defined as the process by which a nation strives to widen its cooperation and involvement in global affairs. Involvement and cooperation is normally in the realms of business, communication, socioeconomic, political and environmental developments.
The aim of globalization is to give nations a greater competitive position with lower operating costs and to have access to vast resources at an economic cost. This position is made possible through diversification of resources, establishment and development of new markets, and having access to primary produce at economic prices.
Globalization is a contentious issue in the world today as there have been debates on its effects on developed and developing countries. Critics of globalization have asserted that its negative effects impact developing countries more negatively as compared to developed countries.
Objective
The aim of this article is to assess the assertion that the negative effects of globalization impact developing countries more than developed countries. The paper will draw on figures and reports from global development agencies to fully ascertain the truth on the effects of globalization.
Effects of Globalization
Globalization entails an improved integration between national economies and this implies a reduction in barriers of trade and creation of more investment opportunities between various economies. The success of a country in implementing globalization strategies relies on its ability to fund these projects. Due to the developing countries’ limited budgets, most of them struggle to catch up and compete favorably with the developed countries.
Limited budgets have also caused developing countries to become exporters of primary produce as they do not have the ability to construct manufacturing industries (Bigman 2002, pp. 49). Even though developing economies have a comparative lead in raw materials, such resources offer little hopes for economic progress. Besides, raw materials have volatile prices and this can cause frequent economic disruptions.
One of the negative effects of globalization is that it increases the movement of labor from one nation to another. Since developed nations offer better wages, highly skilled labor from developing countries move to developed countries and hence causes a shortage of labor in developing countries (Ahmad 2001).
Globalization has caused the movement of jobs from developed to developing countries to take advantage of cheap labor, while this may seem as a blessing to the developed countries, the truth is that such movement affects developing countries negatively (Bigman 2002, pp. 72). Finished products are normally returned to the mother countries yet the host country is normally the source of raw materials and labor.
This scenario has ensured that developing countries remain exporters of primary resources (raw materials). A look at the CIA World Factbook confirms this anomaly (CIA 2010). For example, the top ten world exporters are all developed nations, and the destination of these imports is mainly developing nations.
Another disadvantage of globalization is that any disruptions in any one economy is extended into other economies, this was evident in 2009 when a financial crisis that began in the US affected all countries in the world.
However, developed countries, with huge financial budgets, were better placed to offer stimulus packages to their economies and therefore lessen the effects of the crisis (Ahmad 2001). Developing nations are heavily affected by global financial disruptions than developed nations.
Reference List
Ahmad, Aqueil. 2001. “Globalization and the Developing Countries, with Especial Reference to Cuba.” Globalization. Web.
CIA. 2010. “Country Comparison: Exports.” CIA World Factbook. Web.
Bigman, David. 2002. Globalization and the developing countries. NY: Elsevier.