Introduction
Globalization is the international unification, global amalgamation of individual national economies, social cultures, technologies, and political powers into an integrated single society. Globalization is not a recent day concept and has taken many years for the current world to develop into what it is today.
Globalization has transformed the world outlook into a more open-minded or neo-liberal present day form. Globalization can also be viewed as the process of heightening relationships between national economies through improved international trade, foreign direct investments by Multinational corporations, and international financial investments.
The world in the recent past has witnessed fast flow of information, people and materials from one part of the globe to the other, thanks to globalization. Globalization in the most basic terms can be viewed as the integration of the global cultures, and as a result reducing the world into a global village. Growing integration of the world economies and societies has been an endless and heated debate in the global economies in the recent past.
In the 21st century, great leaps in the technological advancements coupled with myriad innovations have been witnessed. As such, integration of societies has become possible as people can communicate with much ease from one part of the world to another. Globalization can be characterized be expansion of communication networks and transportation systems.
For instance, the internet has made it possible to relay data and information from one part of the world to the other more promptly hence crating a global network. Also, transportation of material and information has been improved through the innovation of more efficient transportation of networks.
For example, the innovation of large and fast air couriers and electric trains has enhanced movement of people from one nation to the other. Hence, it is possible to travel half way the world within one day thanks to improved transportation. Globalization as a result, has seen the world become a global village with different economies, societies and cultures creating a global network.
Globalization, as a matter of fact, has improved the wellbeing of the global citizens. Individuals and firms can outsource labour, materials and funding they require form any part of the world with much ease thanks to globalization. It is becoming apparent that no nation or individual that wants to compete reasonably can dispense with dynamics of globalization and survive in the current global market.
Globalization offers many opportunities to the global citizens among them making their lives better. However, there are a couple of risks and challenges associated with globalization and that have a bearing in the lives of the global citizens. This essay seeks to analyze three key areas that could Impact one’s life career and future.
The opportunity of Poverty reduction
Globalization has increased the flow of fund and information globally through online stock markets. Global financial markets where different national economies can access funds have been made possible by globalization. Nations can access external borrowings and also trade in national currencies hence helping support trade and investments levels.
Nations can use the funds accessed to develop the infrastructures and create employment to their citizens hence improved well being. Globalization has also widened the global market for products and services hence impacting on the global industries.
Mobility of the factors of production has become possible through globalization. Nations that are not endowed with natural resources can now access these resources through importation and also enjoy the vast global market hence reducing poverty and facilitating international trade.
Moreover, globalization has supported the notion of free trade through lowering trade restrictions on direct foreign investments between nations. This has also enabled foreign companies to be located in different nations where they are close to the raw materials and hence creating employment in those countries.
Scenario 1
A third world national government can attract foreign citizens’ investments through offering governments securities for sale in the security exchange market. For instance, the government of Kenya encourages foreigners from developed nations to invest in government bonds by reducing regulations and the tax rates on interests on the investments. In this way, the government attracts foreign investments and hence is able to access funds for development of say infrastructure.
The risk of increasing inequality among the rich and poor nations
Inequality can be defined as the disparity between the incomes and the standards of living among countries their citizens. Various globalization aspects could contribute to the widening of the poverty gap between nations.
For instance, the world wealthy nations utilize the loopholes in the liberal markets to start Multinational Corporations (MNCs) in the developing nations. These MNCs utilize the local resources, utilize cheap labor from the local citizens and repatriate the gains made to their wealthy nations. As such, the poverty gap continues to grow between the rich and the poor nations.
Scenario 2
Developed nations’ MNCs such as the Barclays bank invest heavily in third world countries to their mother nations’ benefit. For instance, the Barclays bank has invested in Kenya (Africa) where it reaps a lot of profits, occasionally much than in their country of origin. The bank offers poor salaries to the local citizens and repatriates the rest of the profits to the United Kingdom contributing to the widening of the poverty gap.
The risk of increased international overdependence
Globalization has made it possible that nations can specialize in what they can produce more effectively and with much efficiency. Naturally endowed nations supply the natural resources to the less endowed nations. Global outsourcing in regard to the factors of production has become apparent. As such, nation can outsource expertise from more developed nation to suffice their labour needs thus eliminating the need for incurring expansive training of nationals.
However, the international interdependence exposes nations to the risk of becoming over dependent and failure to develop capacity internally. Increased international overdependence is multifaceted and could range from production of physical good to the rendering of services. Less developed nations could import technology to spur their own development but sometimes it becomes very expensive when compared to developing own technology.
Scenario 3
Most countries in the third world cannot have import expertise from the developed world. For instance, China and Japan have continued to dominate the infrastructure development contracts in Africa. Most road construction tenders in Kenya are won by the Chinese. Hiring of expertise is an expensive affair and developing nations such as Kenya should concentrate on their own expertise.
Response plan for high priority risk/opportunities associated with key areas stated
In response to the opportunity of poverty reduction, nations should optimize their gains reaped from globalization. For instance, nations should enter into trade agreements that enable them to access raw materials cheaply and also enjoy the expanded market. The nations can also improve their transport and communication networks to enhance the flow of information and materials.
In order to mitigate the effects of widening the poverty gap among the rich and poor nation, international bodies should come up with measures such as trade conventions that regulate the conduct of the rich nations. The developing nations should also formulate legislation that regulate the conduct of foreign companies such as imposing higher taxes and imposing demands to such companies to offer better working conditions for the locals.
Summary report
This essay has analyzed the way globalization as a megatrend has the potential of affecting ones life, career and opportunities. Globalization has continued to spark debate in economic world as different people interrogate its effects on the global economic spectrum. It has influenced the way information and factors of production flow in the globe reducing the world into a global village. Among the opportunities offered by globalization is the education of poverty through improvement of standards of living.
Conversely, the risks associated with globalization are the widening of the poverty gap among the poor and the rich nations, and increased international overdependence. To ramify on the opportunities, nations should maximize their participation in international trade through the development of infrastructure.
On the other hand, the risks should be combated through trade regulations that curtail the conduct of the rich nations and encouraging the development of nations own internal capacity to eliminate over dependence. Nations can regulate the various dynamics of globalization and benefit positively from the many opportunities it offers to global citizens.
References
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