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Impacts of Globalization on the Developing Countries
Introduction
The video by Zohari (2020) evaluates how globalization impacts developing countries. The most debated issue in the modern world is globalization, with some people supporting and others opposing it. Some people consider globalization as a process of opening up economies to facilitate free trade. For them, a high rate of globalization expands opportunities for countries and benefits workers in underdeveloped and advanced nations. Additionally, it has beneficial effects on consumers since it increases choices, drives prices down, improves services, and generates new job opportunities. Thus, they see globalization as a positive force with significant potential of raising living standards and accelerating the economy. Conversely, others think globalization is a strategy of the industrial nations and multinational organizations to safeguard their interests and establish a new form of colonization. This category of individuals sees globalization as a strategy that increases poverty, widens inequality between the rich and economically disadvantaged, deteriorates workers living standards, and raises unemployment.
Globalization is a stoppable phenomenon that influences all aspects of peoples lives. Zohari (2020) indicates that it increases economic and non-economic linkages worldwide, implying the integration of economies and societies across the world. Globalization is compared with the considerable appealing cross-border flow and integration in the movement of goods, technology, labor, and capital, resulting mainly from breakthroughs and transportation and communication technology. Economic globalization is the most debated type of globalization, which means global interlinkages of the markets in goods, services, capital, and financing. Various factors that contribute to an increased rate of economic globalization include liberalization, deregulation, privatization, and declining costs of transport and communication. Lack of accountability, commitment, proper planning, and integrity of the less developed countries governments are some of the factors that make the nations not benefit more from globalization. Sustainable economic development policies, the adoption of technologies, and the provision of quality educational skills are vital approaches that can guarantee optimal benefits of globalization to all countries.
Social and Economic Issues of Globalization
The short video has several features related to the course, such as social and economic issues of globalization, the impact of globalization on education and personal development, and the internationalization of education. As countries and people become more interconnected due to globalization, changes in how they do things, level of development, and living standards are inevitable. Management of these effects is imperative to alleviate any short-term and long-term adverse impacts and reap optimal benefits.
The increased poverty level in developing countries is one of the social issues associated with globalization. Ideally, everyone expected that opening up the global economy to facilitate free trade between countries would significantly reduce poverty in developing and under-developed nations. However, globalization has had conflicting impacts on poverty levels in developing nations. Globalization increases international trade and foreign direct investment in developing countries, facilitating the reduction of poverty (Guzel et al., 2021). The rise in international trade means that developing nations have access to the global market for their commodities. As a result, the production rate is bound to upsurge to ensure that they meet the demand. Therefore, local firms will hire more people from their country to increase their production capacity, leading to high-income distribution. The rise in disposable income among individuals in the nations further stimulates investment and the growth of local businesses. The end outcome of such an impact of globalization is a significant reduction in the population living below the poverty line and improved living standards.
Foreign direct investment (FDI) is another important factor of globalization that triggers poverty reduction. FDI increases the level of employment and stimulates the economic growth of the host nations. This advantage is one of the most important reasons why developing countries put efforts into attracting FDI. According to Yulek and Gur (2017), more FDI enhances both the manufacturing and service sectors of the economy. The increased rate of FDI in developing nations creates jobs for skilled and unskilled individuals. FDI also indirectly benefits locals since the construction of factories and production of raw materials are sourced internally. Consequently, it boosts economic growth and lowers the poverty level.
Nevertheless, the increased trade and FDI have counterbalance effects on the poverty level reduction in developing countries. Therefore, the proportion of the population living below the poverty line remains the same or increases due to globalization (Guzel et al., 2021). While the latter positively influences labor productivity, the demand for skills increases the possibility of redundancy of low-skilled individuals, who comprise the largest percentage of those below the poverty line. Possible crowding out of the local firms by multinational companies can also increase poverty. Further, globalization can rapidly promote poverty levels in developing countries due to vulnerability and possible effects of economic crisis associated with capital liberalization and adoption of production technologies. Most international organizations use technologies in their production processes. Therefore, FDI ends up having an insignificant impact on unemployment among the unskilled and economically disadvantaged population.
The impact of globalization on unemployment in developing countries is also contradicting. FDI and trade contribute significantly to the reduction of unemployment levels. The trade promotes the growth of local industries due to increased demand for locally produced goods. In return, this raises the workforces demand, both skilled and unskilled, since most production processes in developing countries are labor-intensive (Saleem et al., 2018). Equally, FDI is directly and indirectly associated with decreased unemployed. Multinational firms investing in developing countries hire locals to fill different positions in their companies. Local suppliers further employ more workers to meet the FDI demand for raw materials (Saleem et al., 2018). Thus, globalization helps developing countries reduce their rate of unemployment for both skilled and unskilled labor forces.
However, globalization can cause more unemployment in the long run due to such factors as the adoption of new technologies and crowding out of local firms. The high rate of globalization means that new production technologies spread faster to every corner of the world (Inaba, n.d.).
Additionally, the demand for goods increases due to more accessible access to the global market. Therefore, local and international firms have to look for faster and cheap means of production to meet the market demand and remain competitive. While the rapid advances in technology create new innovative occupations that require specialized professionals, it negatively affects the labor market. Large-scale adoption of technology by firms reduces demand for the skilled and unskilled labor force, increasing the unemployment rate. The proportion of unemployed skilled labor force further increases as untrained individuals opt to train to increase their chances of getting better-paying jobs (Inaba, n.d.). Even the FDI only cares for the highly skilled labor force.
International companies that establish operations in developing countries can crowd out local firms. The effect makes a significant number of local workers lose their jobs. Privatization of government firms and trade liberalization also increase the level of unemployment in developing countries. Privatized companies reduce the demand for labor to ensure maximized profits. Trade liberalization is an important feature of globalization, which benefits the manufacturing-producing nations more than the agricultural-producing countries (the less developed countries). Thus, globalization has more adverse effects on unemployment than good in the long run.
Globalization also increases wage inequality within countries and across nations. The relatively rich nations can intensify the importation of manufactured goods using a low-skilled workforce from developing countries. On the other hand, globalization opens more opportunities for high-tech companies to export their products using highly skilled employees (Hauk, 2019). These two aspects enlarge the wage gap between low-skilled and high-skilled employees across countries. The rapid change in technology associated with globalization also increases wage inequality. New technologies raise the demand for specialized professionals such as engineers who can service production machines. Conversely, only a few staff such as assembly-line workers and typists is required if firms use computers to automate production processes (Hauk, 2019). The inequality further occurs because trade liberalization benefits the developed countries more than the developing ones. Therefore, countries need to develop and implement policies to minimize inequality and prevent offsetting the benefit of poverty reduction.
It seems that the relationship between globalization and income inequality is significant. Heimberger (2020) conducted a misanalysis using data from 123 primary studies and 1254 observations to evaluate the relationship. His findings indicate that globalization has a small to moderate increasing effect on income inequality. Additionally, the inequality associated with financial globalization is larger than that linked with trade globalization. Further, globalization has average inequality-increasing effects on both developing and rich countries. Thus, global policymakers and international organizations such as IMF and WTO need to adopt appropriate strategies to curb this negative effect of globalization.
Globalization causes brain drain in developing countries, which is a significant challenge for the nations. Notably, a skilled labor force is fundamental for every countrys economic growth because they guarantee higher productivity. Therefore, developing countries invest in equipping their citizens with appropriate knowledge and competencies. However, educated and highly skilled workers immigrate to other developed nations. They leave their home country for another that promises a better life for themselves as well as their families. Lack of employment and well-paying jobs in developing countries are some of the factors that contribute to brain drain. The outcome of the issue is that the developing lack the necessary human resource to stimulate and accelerate economic growth. Minimized regulation of the flow of people across borders due to globalization promotes brain drain in developing countries.
Education and Personal Development
Globalization impacts education and personal development due to such factors as the internationalization of key competencies, the convergence of educational organizations models, and the diffusion of student performance assessment. Globalization influences education, an imperative aspect that shapes society. The increased interdependence of countries associated due to globalization allowed advanced countries to sponsor and accommodate students from less developed nations to equip them with knowledge and skills beneficial to their economy. It also facilitates the establishment of global education systems helpful to every country, regardless of the level of economic development (Albusaidi, 2021). Such systems ensure that students obtain new cultural skills, develop globalized thinking, and learn how to behave according to cultural differences. Albusaidi (2021) adds globalization of education boosts personal development in different ways. Students develop the ability to distinguish appreciated intercultural differences, and new languages, and the capacity to work with individuals from varying cultures. Indeed, globalization of education ensures that every nation has an adequate number of skilled professionals.
Internationalization of Education
Investment in human capital is vital for sustainable economic development since it is not affected by such factors as inflation and depreciation. Globalization allows institutions to integrate learning programs to offer the best skills demanded by global industries. As a result, internationalization of education is a significant strategy adopted by schools in both developing and advanced countries to establish more effective educational systems. The internationalization of higher education considers both national and international challenges that need to be addressed (De Wit & Altbach, 2020). It is an approach that aims at improving educational quality in the exceedingly competitive world. International communities cannot implement this strategy in the absence of globalization. Notably, most colleges and universities are national institutions funded and regulated by the government since they have an indispensable role in local and global economic development. Therefore, opening up borders to facilitate the free flow of students and instructors across the country is an essential aspect of globalization that promotes the internationalization of education.
The internationalization of education has significant personal and economic benefits among individuals from developing countries. De Wit and Altbach (2020) indicate that the internationalization of education generates a global knowledge economy, promotes autonomy and academic freedom, and reputation and excellence. Students from such nations get opportunities to pursue higher education in countries of their choice, where they believe they can gain the necessary knowledge and skills. The move increases their chances of getting well-paying jobs and improving their living standards. They can apply the acquired knowledge in their home country to boost economic productivity.
Nevertheless, less developed countries can be disadvantaged by the internationalization of education. In most cases, bright students from such nations move to advanced countries (De Wit & Altbach, 2020).
The chances are that the host country can opt to absorb them after graduation when they display exceptional knowledge. Consequently, the home country is deprived of much-needed skills to accelerate its economic growth. Therefore, developing countries need to develop the quality of their education and institutions and establish economic policies to train and absorb students beneficial to economic growth.
Application to a Theory
The content of the video applies to globalizations theory of liberalism. The latter considers the extension of modernization through the market as a trigger of the globalization process (Amadi, 2020). The theory holds that the natural desire of humans for political liberty and improved economic welfare leads to globalization. The two forces interlink people globally through technological advancement in transportation, information processing, communications, and appropriate institutional and legal arrangements that facilitate the spread of liberal democracy and markets (Amadi, 2020). Therefore, the construction of infrastructure plays a significant role in supporting globalization.
My Role as Agents of Change
My role concerning globalization is to manage its impacts on both developed and advanced countries to guarantee mutual benefits for current and future generations. I can alleviate the negative effects of FDI and trade liberalization by making sure that the developing nations have the needed ability to be competitive in the international marketplace. The main focus would be on increasing their production capacity. The first strategy would be to enhance the quality of education in the countries. The approach would see the nations have a skilled labor force. Next is to develop and implement policies that attract FDI and ensure the growth of local firms to reduce the level of unemployment and poverty. These tactics can also minimize the issue of brain drain since trained individuals would be confident that they will get better-paying jobs in their home country.
References
Albusaidi, S. (2021). Globalization and its impact on higher education: The case of colleges of technology in Oman. Arab World English Journal, (2), 284-297. Web.
Amadi, L. (2020). Globalization and the changing liberal international order: A review of the literature. Research in Globalization, 2, 1-9. Web.
De Wit, H., & Altbach, P. (2020). Internationalization in higher education: global trends and recommendations for its future. Policy Reviews in Higher Education, 5(1), 28-46. Web.
Guzel, A., Arslan, U., & Acaravci, A. (2021). The impact of economic, social, and political globalization and democracy on life expectancy in low-income countries: are sustainable development goals contradictory? Environment, Development and Sustainability, 1-18. Web.
Hauk, W. (2019). Globalization and inequality: sharing wealth one of greatest challenges. The Globe Post. Web.
Heimberger, P. (2020). Does economic globalization affect income inequality? A metaanalysis. The World Economy, 43(11), 2960-2982. Web.
Inaba, C. (n.d). The effects of globalization on job choice and unemployment under labor search friction [Ebook] (pp. 1-24).
Saleem, F., Farooq, F., Chaudhry, I., & Safdar, N. (2018). How do globalization, technological change and employment impact economic growth in developing countries? Evidence from panel data analysis. Review of Applied Management and Social Sciences, 1(1), 39-49. Web.
Yulek, M., & Gur, N. (2017). Foreign direct investment, smart policies and economic growth. Progress in Development Studies, 17(3), 245-256. Web.
Zohari, T. (2020). Globalization and its effects on developing countries [Video]. Web.
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