Globalization refers to global integration of cultures, economies as well as people. Globalization has benefits, for instance, enhanced relationships between nations, increased trade as well as greater acceptance and tolerance of foreign cultures.
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However, despite numerous benefits connected with the issue of globalization, it is also must be highlighted that globalization has some shortcomings that mainly affect developing nations rather than the developed ones. Globalization has negatively affected the Gross Domestic Product (GDP) of developing nations, it caused shortages of essential foods as well as resulted in escalation of prices of maize and wheat in developing nations.
Globalization of the world economies have resulted in increased market for goods and services. Nowadays, many multinational companies have engaged into mass productions as a result of increased market for their products (Brook 2003; Bhagwat 2012). Availability of foreign markets has enabled multination companies to make huge profits which have mainly benefited shareholders and those employees who work in these companies.
Most multinational companies have channeled their products in developing nations. Although, residents of the developed nations have enjoyed access to variety of products, the presence of foreign products in developing nations have caused more harm than good. This is because foreign goods have saturated the market of developing nations which have been blamed for phasing out demand for local products that has often resulted in closure of some local industries.
Most multinational industries are based in developed nation; because of their advanced technology, multinational companies are able to produce goods in mass production and sell them at much lower prices than similar products produced locally. This has resulted in over consumption of foreign products which have negatively affected the Gross Domestic Product of developing nations. In order for countries to have strong economies, they are required to export more than import (Milanovic 2011).
Nonetheless, this has not been the case for many developing nations. Many developing countries that have not been in a position to implement appropriate tariffs to regulate inflow of foreign goods have found themselves using most of their resources in importing goods they can substitute with local ones.
In addition, saturation of foreign goods in developing nations which are sold at a lower price than substitute goods from local companies have caused the shut down of local industries in developing nations. This has negatively affected the GDP of developing nations by increasing the unemployment rate in affected nations. Globalization is partly to blame for the large percentage of those people in Asia and Africa who survive with less per $ 2 per day (Firebaug 2012; Gorg 2012; Lozaday 2012; Word Bankc 2012).
The mass production associated with globalization has caused over-exploitation of national resources. Globalization has been associated with emergence of fast food industries. The great demands for fast foods have led to clearing down forests to raise animals and birds to supply the fast food restaurants with required foods. The farms are also used to plant crops that provide feeds for the animals and birds.
Cutting down trees have negatively influenced the global climate resulting in unpredictable weather conditions, which in their term, negatively affected food productions and, particularly, developing nations which are the ones that heavily rely on agriculture. Moreover, the great demands for fast foods have caused a decrease in the production of essential foods such as maize and wheat which have caused food crisis and escalation of prices of essential foods mainly in developing nations (Word Bank a 2012; Word Bank b 2012).
Bhagwati, Jagdish. “Multinational Corporations and Development.” Friends or Foes Blog, comment posted 2012. Web.
Brook, Stephen.Producing Security, Multinational Corporations, Globalization, and the Changing Calculus of Conflict. New York: Prentice Hall, 2003.
Firebaugh, Glenn. “Debate about Global Income Inequality,” Web.
Gorg, Holger. “Globalization, Off-shoring and Jobs, ” Web.
Lozaday, Carlos. “Multinationals, Wages, and Working Conditions in Developing Countries,” Web.
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Milanovic, Branko. “More or Less,” IMF Finance and Development 48, no.3 (2011). Web.
Word Bank a. “GAFSP: Improving Food Security for the World’s Poor,” Web.
World Bank b.” Globalization and the Challenge for developing Countries,” Web.
Word Bank c. “Poverty Data,” Web.