The Effect of Globalization in Economic Development

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The Effect of Globalization in Economic Development

There are fundamental concerns, issues, and resolutions arising from the association of the communities living across the world as a global community. They merge to form a self-sustaining system that facilitates further developments related to their mutual capabilities and abilities. These aspects termed as globalization make them massive and undefeatable in most cases. However, the success of this fundamental globalization has negative effects especially in regard to the importation and exportation of goods.

The economic boundaries as distinguished by countries have profound effects where some nations remain poor while others advance. Economic development is directed by the use of the resources found in a nation. These resources allow the nation to present itself as a competitor among others. In this light, the interconnection between nations is a vital aspect boosting economic development. In fact, researchers argue that the ability to globalize make nations outstanding and economically advantaged.

Essentially, globalization arose with the advancement of technology. It became reliable when massive and reliable technology in mechanical and information engineering had developed to a great extent. Goods were transported from one point to another within a very short period. The information technology made the purchase of products overseas more accessible and highly deliverable as compared to the periods before the 19^th century.

This aspect implied that globalization began during the 19^th century when the usual international trade advanced into globalization (Pugel, 2012). The cost of trade became low when ships and communication networks proved reliable. In fact, transport route became mapped properly with direct ways taking less time like the journey around Africa through the Cape of Good Hope.

New developments regarding the transport machines were introduced including the electric trains, cargo ships with powerful engines, and planes equipped for air deliveries (Tyers & Ying, 2011). The most astonishing factor is the fact that these innovations became globalized and shared between nations. The machines and ideas were sold and bought across the globe. This sharing evolved a geometric expansion of the economic developments.

The positive and negative effects of globalization on the economic development are presented in such aspects as outsourcing where jobs benefit a population of people from one nation but not the other. It is argued that globalization is a key aspect introducing distinct classes associated to inequalities in income.

The gap impending gap between the rich and poor is elevating where rich people become richer and the the poor ones grow poorer and miserable. It is the master mind behind sparsely populated real estate formed besides densely populated slums. Furthermore, globalization drives diseases across nations facilitating their spread and raising the death toll of hazardous or pandemic diseases.

Globalization has influenced modern life in many ways. Even when people from the United States may not know where Beijing is located, they are purchasing items processed from this place within China. For instance, the report from Federal Reserve Bank of San Francisco affirms that about 36% of shoes and clothes arriving in the US markets originate from China. This case is no different from other cases throughout the globe.

Economists support the argument that individual economies are facing growth in respect to the prevailing globalization. In essence, it makes marketing more efficient through elevating competitions, limiting the military conflicts, and distributing wealth in equal rations throughout the world. The foreign direct investments have shown drastic increments of growth that facilitate the industrial setups and technological improvement by ensuring improved firms globally.

Furthermore, the improvement of competition structures trigger establishment of new technologies especially in respect to the world trade. Such huge markets enable large companies to realize the economies of scale even though the development may have small investments. The interdependence between nations cause instabilities in cases of world wide fluctuations.

References

Pugel, T. A. (2012) International economics. London: Richard Irwin Publishers.

Tyers, R., & Ying, Z. (2011). Appreciating the Renminbi. The World Economy, 2(34), 265-297.

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