Globalization is the process of enhancing connectivity and mutually supportive global markets and commerce. It leads to formation of a world economy and a single world market where there is disintegration of the nationalized borders an exercise which leads in integration of various nationalities and their economies. It is therefore a real phenomenon which creates positive as well as the negative impacts (National Council on Economic Education 129).
Globalization has therefore been made possible due to the increasing technological development more so on communication and internet. As the globalization increases, the countries are faced with the competition as a challenge which further leads into anti-globalization campaigns. This discussion is inclusive of the current as well as previous globalization effects on Latin America countries.
To begin with, Latin American economists, held soaring expectations of the market development which seemed possible in the emerging economies early on1990. There is still hope of the markets development even though the reality seems far from being achieved because equity and the commercial bonds are still illiquid and fragmented.
The stock market has been on liquidity decrease. In Latin America, there has been institutional reformations and advancement in the microeconomic management thus more expectations on the capital markets development.
Most countries in Latin America do dynamically and actively involve in globalization participation on development. It is also possible to present evolutional data of its capital markets that can be used in emerging economies apart from globalizations (Torre and Schmukler 3).
Although globalization has got a long history, its progression in the 21st century is not only remarkable but failure to know its outcome creates more trouble and tension to economists and other people in the world.
Some people have argued that there is no significant difference between the current global economy and the one which existed in the 19th century, it is difficult to negate the fact that the pace of the process of globalization is accelerating at a very high rate. For instance, there is a lot of technological development in the sector of information technology which results to further integration of markets (Hill and Dhanda 1020).
In addition, due to reduced trade barriers between different countries, people are moving from one country to another at a very high rate. The new forces that have emanated from globalization are beyond the ability of any country to prevent or even oppose. Factors that lead to globalization are referred to as drivers of globalization as discussed below.
There are various market globalization drivers which are inclusive but not limited to common customer needs and tastes, global customers, lead countries and transferable marketing. Common customer needs and tastes refers to a phenomena which results when customers in different countries prefer similar goods and that shapes an industry since every international company is forced to use global strategy levers to be in a position to fit in the global market.
Some customers are referred to as global customers because instead of buying from global markets, they prefer international markets helping to further increase the force of globalization. Transferable marketing helps to expand and increase global companies as it becomes easy for companies to market in different countries (Jäger 13).
Cost globalization drivers refer to all the factors that affect economics of industries like global economies of scale, favorable logistics, fast changing technology, sourcing efficiencies, difference in exchange rates and steep experience curve to mention just a few. As highlighted earlier, these factors affect an industry making it to go global in order to continue functioning and making profits. For instance, high products development costs forces a company to go global especially when the costs cannot be paid by domestic markets.
Currently, the fast changing technology also increases the costs of production. As a result, industries which use the current technology are forced to focus more on global markets since such markets help in recovering cost of production easily while compared to domestic markets. In such situations, globalization continues to extend and flourish (Czinkota, Ronkainen and Moffett 225).
Globalization is heavily affected by rules given by government inform of various policies which include favorable trade policies, common marketing regulation, government owned competitors as well as customers, host government concerns and compatible technical standards.
For instance, globalization is influenced by various governments polices like non tariff barriers, export subsidies and capital flow restrictions. Polices create a favorable environment, international trade is highly practiced, and globalization becomes inevitable. Competitive globalization drivers are inclusive of high levels of imports and exports. Following increase of trade between different countries, interaction between people increases leading to globalization.
There are still other drivers like revolution of the sector of communication and information technology as well as improvement of business transactions. Such and other factors beyond the scope of this paper enhance globalization hence the term drivers of globalization (Kloby 250).
In Mexico, the areas that hold minimal disclosure and experience to globalization, basically areas that hardly draw foreign investment with no international market in reverence to unavailability industries seem to lag behind. Mexico has portrayed aggressive aspects in economy opening thus becoming a popular montage in focus of the globalization effects.
In 1985, the unilaterally tariffs were cut and also elimination of other boundaries that restricted trade. Many of the foreign investments boundaries were put into an end by 1989 while the liberation took place in 1994. There were several policy changes that contributed to the rise of international trade in Mexican at about 21 percent since 1980 to 2002 which recorded 11 and 32 percent respectively (Davis 421).
Globalization has led to relatively augmented incomes in Mexican due to its exposure to the global market. Mexico culture has also been influenced significantly for instance, development of westernization in reverence to fashion and language. Also, there has been local nationalism development in Mexican.
Globalization has led to structural change which is an indication that there are more expectations for the workers improvement. Out of improved technology: transportation infrastructure, communication, and energy have attracted foreign investments that in turn results to creation of job opportunities. Fall to barriers of investment has increased more chances to the trading system thus increase in income level through global economy involvement (Harrison 419).
Mexican joined a free trade union of the North America in the aim of achieving First World access. Out of this in 1995, poverty increased as well as the unemployment rates (Alias 4). Out of globalization, the foreign products found their way in Mexican.
These products presented a positive appearance but soon the domestic countries were faced with competition challenge with global companies in the struggle of maintaining the customers. International companies that find their way into Mexican, they entirely center on maximization of the profit paying less consideration to the Mexico economy (Harris and Seid 144).
In Columbia, there were tariff cuts in early 1990 as a result of the trade liberalization when it abandoned the industrialization policy. Therefore, there was the reformation of the Columbian trade on the financial markets. Also, there were some poverty improvements even though this only happened in the urban centers of Columbia as in rural areas there was stagnation of the same out of globalization. Columbia however has benefited on the quick global economic growth and interdependence on commercial activities (Uribe).
Out of the China and Eastern Europe output rise, there has been an increased demand in Columbia’s exports products which include: ferronickel and oil. Globalization has played a very significant role cultural transformation in Columbia, Nicaragua and other Latin American countries. All through, it has led to increased contacts on different values and exchange of diverse ideas (Robinson 102).
On economic globalization, there have been environmental consequences that have occurred as a result of the economies openings in Columbia, Panama, and Nicaragua where land use has become unrestricted thus failure of proper regulation to manage the land, has resulted to land degradation. Regulations are important as they play a significant role safeguarding the environment. Sustainability can however be achieved even in the practice of free trade.
The new development of the technologies in Panama has changed the trading face due to the increase in labor mobility and also the capital flow (The Effects of Globalization on Developing World Agricultural Systems). Geographical distances are no longer a barrier to labor markets incorporation. It is clear that there is already presence of the technological advances, financial liberations and also the trade innovation.
In Latin American countries, globalization is said to take a skeptical view as the rule that govern it are said to be unfair as they are specifically considered to advance other industrialized countries. Globalization has resulted into promotion of specific material values at the expense of others.
The sovereignty of the developing countries has been taken away by the way globalization is managed. There are economic systems which are grossly damaging as they are inappropriate especially when pressed upon Latin American countries (López-Alves and Johnson 150).
The global economy is currently characterized by various changes that result from globalization and the ever advancing technology. Further studies illustrate that there are various trends that are observed and the same result to the changing economy. Currently, manufacturers are using fewer raw materials to manufacture their products (Edward McMahon 14).
The current economy is also marked by less demand for physical labor and as a result, the cost of production largely depends on the applications used during manufacturing other than on human resources. Also, financial markets have become global because globalization has led to integration.
Economy has been characterized by international trade composed more of human resources, financial capital and ideas. It is therefore clear that though initially the success of a country was based on the availability of natural resources, currently, that is not the case since the most important factor is adding value to the products. As a result, countries which are able to use the most advanced technology in production have ended up being the economic giants.
As highlighted earlier in this discussion, it is important to note that there are not only challenges but also opportunities that have resulted from globalization. Several steps are required that managers need to take in order to remain successful. To begin with, it is important to identify the available opportunities in the global market.
Secondly there is needed to upgrade the products and services in order to be competitive enough in the global market. Since it is possible to invest in other countries, it is important for the managers to study the economic trends of such countries in order to invest where they can get maximum returns.
It is necessary to improve the quality of lives in the Latin American countries, thus calling for the reformation of globalization. Globalization can only be achieved when it is made fair to the whole society- everyone, thus getting rid of poverty pervasiveness. Globalization should by all means, enhance foreign assistance at the same time in debt relief (Williams 163).
Trading should be fair to all where the host industries inclusive of Latin American countries through globalization. It is good to provide free trade but at the same time liberalization should be limited. The main aim of globalization should not only search for economic profit as there is a need of enhancement of environmental preservation as all leaders should fix imperfect systems that lead to global governing (Eitzen and Leedham 119).
Globalization is a real phenomenon especially in the 21st century and cannot be stopped. Its challenges and opportunities are evident in each and every country. It is therefore most important for every person to adapt to the changes of the same. Countries need to make policies that can help them combat any problem that may emanate from globalization as well as policies that can help them prosper as other countries prosper.
For employees, it is important to increase knowledge and skills especially due to the fact that studies have indicated that the process of production is currently using the very recent technological development. Although there is a lot of literature on globalization, it is important for scholars to study the effects of globalization in specific countries and learn more on globalization.
Work Cited
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