Globalization is about being interconnected by communication and transportation. It means that people from all over the world can establish business and personal relationships in a manner deemed impossible a few centuries ago. This is made possible by the rapid development of technology as well as the realization that the global expansion of a particular business will increase the profit of corporations. Yet, it must be pointed out that globalization does not only result in more wealth for highly industrialized nations but globalization forces can also negatively affect the way of life in developing countries and two of the best examples are India and the Philippines.
This study will attempt to understand globalization and its effect on developing countries. It would be impossible to study all the emerging economies worldwide and therefore this paper will only be limited to the study of two countries situated in Asia. India and the Philippines were former colonies of England and the United States of America respectively. The Indians and the Filipinos are experiencing the simple fact that globalization is a “two-edged sword” it is both beneficial and destructive at the same time.
Overview
There are those who think of globalization as some sort of the “flattening” of the planet. It is a helpful illustration because it is able to encapsulate so many facets of globalization into one short statement. First of all, a flat world means that nations could no longer be in isolation and secure in the belief that others needed their help but they can stand on their own and be an island unto themselves. In this new era, every continent and nations are interdependent. The problem of one nation can be a problem for those who are in close proximity or those who belong in the same region. The current global financial crisis is an example of this phenomenon.
Globalization is responsible for creating a flat earth because the speed of technology and transportation allows businessmen from all over the planet to compete on a more level playing field. For instance a Filipino entrepreneur can set-up a website at very minimal cost and then start advertising for a product that has a huge demand in the U.S. for example. Americans can stumble upon this website or they can be referred to it by another party. In short, Americans are made aware of this website, the products being sold as well as the identity of the Filipino entrepreneur and if they find it mutually beneficial to do business with each other, a business relationship can commence.
The ability of the average person to reach out to a foreigner and do business from long distances was unheard of a few centuries earlier. In order to do business with other countries massive capital is needed. Only the very rich are able to buy and sell overseas. Today, this is no longer the case. As pointed out earlier, an entrepreneur from a developing country can easily create a website to sell their products and services making the planet flat from a communication and business standpoint. In other words there are only a few barriers that exist when it comes to the selling of goods and services to markets beyond national boundaries.
The significant increase in business opportunities could not be possible without the technological breakthroughs in the field of communication, computers and transportation. As a result there is another way to describe this world in the context of globalization. There are many who are saying that the planet is shrinking, figuratively speaking. The planet is shrinking in terms of communication and transportation which is brought about by radical improvements in telecom, high-speed Internet as well as more efficient ways to travel. Tthe “shrinking” of the planet is an enormous benefit to multinational companies.
Jumbo jets as well as giant cargo ships made it easier for businessmen to establish markets in far flung places. This gave international businesses the capability to draw in more people and to expand their reach as well as influence to every corner of the globe. Their headquarters are still located in England and New York but their operations span the globe. Instead of being overwhelmed by the great distances that separate the head office from the factory floor, this kind of business strategy is already considered as the norm in today’s highly competitive business environment.
The benefits of globalization can be easily understood through expanding markets. A company operating in the heart of the United Kingdom can do everything in its power to increase production and to improve the quality of its products. But without a strong demand there is no incentive to expand and to pursue higher goals. Globalisation is the way to find new markets and therefore sustain a high demand for a particular product. For instance a UK firm may have been struggling to meet their sales quota by selling to British homes alone but when their company expanded to Latin America, Asia and the United States, the profitability of the business suddenly reached unprecedented heights.
The rewards of globalization from a businessman’s point of view is not only limited to the number of additional clientele willing to spend their hard earned money for imported products. It can also be extended to the discovery of new methods to optimise production and as a result reduce costs and therefore increase profit margins. There is no entrepreneur or business tycoon that would allow this kind of opportunity to slip by. In other words globalization provides businessmen additional choices when it comes to the location of their factories as well as in the hiring of skilled personnel that can work on their production lines.
With regards to the location of factories and business establishments, India and the Philippines are fast becoming the destination of choice for many corporations looking for alternative locations for their production facilities as well as their business process outsourcing needs. It is not hard to understand why developing countries that happened to be located in Asia are prime targets for corporations in dire need of such facilities as well as services. One only has to get an overview of the requirements needed to set-up a factory or call center in the United Kingdom to understand why it is more cost-efficient to build somewhere else. Aside from the prohibitive cost of doing business in the UK there is also the problem of high wages demanded by the local work force.
By building factories in India or the Philippines a UK businessman can build a less expensive facility, harnessing the intellectual as well as technical capability of local engineers and skilled workers. In these places their respective governments are desperate for foreign investment that they are more than willing to give tax breaks for those who are willing to invest in their country. This is an offer that will be too difficult to refuse. After all, the end goal is to make more money and not less of it. The same thing can be said of business process outsourcing. More money can be made because European and American companies need only to pay a fraction of what they have to pay a British or American counterpart. In other words a Filipino or an Indian with similar skills will not demand the same type of salary as those who are working in the Western hemisphere.
Impact of Globalization
Wallerstein is a prominent social theorist who observed that, “…patterns of European development and Third World underdevelopment as interrelated phenomena. The ‘gains’ of the one generated the impoverishment of the other” (Beiharz, 216). Wallerstein also pointed out that behind the rhetoric there is a certain world system. Wallerstein went further by saying that this world system is in fact ‘world capitalist system, wherein developed nations impose their will on Third World countries (Roberts, 2). This can be understood by simply tracing the finished products coming from the assembly lines of developing nations. The same product the local workers labored so hard for, can be sold to the local economy at significant costs. The one who expected to buy cheaper products because of the fact that the factories are located in their nation will surely be disappointed.
Wallerstein contends that nations are interrelated but explained that it is a complex relationship and not between equals. In globalization, nations can be classified into a hierarchy. For Wallerstein there can be no equality in the global stage where everyone competes against each other. For this eminent sociologist, the world may be flattened but there is a center and a periphery. In the center one can see powerful nations while in the periphery one can see weaker states that are forced to accept what highly industrialised nations are telling them to do. are Wallerstein argued that, “…a European world economy was established during the course of the long sixteenth century by the uneven structuring of trade and development patterns between a West European core and an East European and Latin American periphery” (Beilharz, p. 216). This so-called uneven development still persists today and yet it can be seen as part of globalization.
If Wallerstein is proven correct, then one can conclude that nations from the 16th century onwards did not develop outside the context of colonialism but in fact perpetuated a system wherein poor countries are subjects to rich and powerful nations. As a result the following generalizations can be made:
- Industrialized nations exploit natural resources of less developed nations.
- The exploitation of the natural resources results in the degradation of the environment.
- It is now more difficult to sustain this type of highly exploitative practices.
It is now clear that globalization is not simply about improvements in the telecommunication and transportation that allowed for a more efficient way to do business overseas, it is also about the amplification of wrong practices that can easily destroy the planet as well as to widen the gap between rich and poor countries. It is beneficial for those who belong in the “core” nations but a disheartening realisation for citizens who belong to the “periphery” nations.
For those who are unfortunate enough to belong to the “periphery”, they are outsiders looking into the life of opulence and excess enjoyed by the rich elites of the Western world. They may welcome the fact that there are foreign investors coming in but they must also realise that their natural resources are being bought cheap. The same gets manufactured locally and yet the finished products are made available to them not with a discount but with the same expensive price tag.
Another implication of Wallerstein’s theory is the fact that those who belong to the “periphery” are powerless to contend with “core” nations because the capitalist system are already well in place. This means that there are only a few countries able to buy and process materials while there are many Third World countries competing with each other to sell raw materials that are readily available in many parts of Asia. On the other hand the technology and capital needed to process the said materials are in the control of the few.
Victims of Exploitation
Aside from the failure to negotiate with the heads of European and American companies, less developed nations are not only being exploited in terms of raw materials such as timber, minerals, etc, they are also being exploited when it comes to human resources. There are many skilled workers in India. There are also many highly educated people coming from Indian colleges and universities. Yet, these individuals have limited employment opportunities. This created a new breed of highly skilled workers that can compete with their European counterparts. Thus, in terms of getting the contract to work on a particular job or project, skilled workers from India and the Philippines easily win against workers from Europe and America but one has to ask at what cost? It is understandable that they should get less pay what is not clear though is how much?
In the case of the Philippines there is another problem that the Filipino society is trying to deal since the time that fathers and mothers are leaving their children behind to live and work abroad. For the government it is hard to say no to this economic development strategy (Parrenas, 11). Every year overseas contract workers generate $10 to $12 billion in foreign currency. This is a great boost for the country as well as for the families that benefit from the money sent back by overseas workers. In the preceding discussion there is the problem with regards to the exploitation of natural resources. There was also a discussion with regards to the question of fairness in terms of remuneration given to Asians compared to their European counterparts but this time the problem is more severe because it involves the future of Filipino families.
It does not require a rocket scientist to realise that without a mother and father, a child will have difficulty adjusting to this world. It is easy to understand why maladaptive behavior can develop in homes where parents are not present to guide and nurture their children. It is important to take a closer look into the impact of overseas contract workers leaving families behind to find work in foreign lands. In the case of the Philippines it is not simply about the problems associated with mother leaving young children in the care of relatives that makes globalization a double-edged sword in this country, there is also the problem of exporting women as domestic helpers abroad. The desperation of these women can be easily exploited by unscrupulous individuals.
Aside from natural and human resources, there are other aspects of Indian and Filipino societies that can suffer from the backlash of globalization. One of which is culture. It seems that a flat and shrinking world is not only about efficiency in communication and transportation but it is also about the challenge of maintaining diversity in a world craving for uniformity for the purpose of developing systems that can simplify business processes. As a result the English language dominates in both Indian and Filipino culture. This is the exact reason why many from UK and the U.S. would love to deal with India and the Philippines. Both societies have large pools of talent that can speak fluent English.
While communication barriers are tumbling down there is the danger that American and British culture can easily dominate others. Since the UK and the U.S. are leading the way in terms of their economy it is hard for Filipinos and Indians to not consider them as more superior. As a result it is easy for citizens of these nations to emulate American or British culture to the detriment of their own. This is another way that globalization can destroy the beauty and diversity in this planet. There is therefore a need to find out how to resist the overwhelming forces of globalization in the context of the relationship between highly industrialised nations and less developed countries such as India and the Philippines.
Conclusion
Without a doubt globalization is something that is inevitable. It is the byproduct of thousands of years of innovation and invention. In the 20th century the confluence of technology and knowledge created systems as well as radical advancements in the field of telecommunication, transportation and computer technology that made it possible to shrink and flatten the world. The result is more cost-efficient way to communicate and do business with others, especially those who are located thousands of miles away. The ability to expand markets and to develop cost-effective ways to produce products is the dream of every businessman.
Yet on the other hand, it must be made clear that globalization is a double-edged sword. There is a beneficial as well as destructive side to it. In the case of India, European and American firms can exploit the desperation of highly skilled and highly educated workers to land white-collar jobs. Thus, businessmen can offer them low wages knowing that they have no choice but to accept it. The same thing with the Filipinos, they are in the same boat when it comes to how their human resources can be exploited by others. This is especially true when it comes to the desperation that drove their women to leave their families behind to work as domestic helpers abroad.
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